Priced Out: Where Higher Rates Could Hurt Home Buyers Most

By Suzanne Woolley - 2014-01-09T16:47:41Z

Photograph by Robert Schlesinger/picture-alliance/dpa/AP Images

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Pain at 6%: Sarasota, Fla.

Monthly income devoted to mortgage bill:

• historic average: 18.1%

• at 6% interest rate: 21.8%

This Gulf Coast tourist town is popular with retirees, but those who aren’t here already could get priced out if rates keep rising. As of 2013's third quarter, affordability was right in line with the historic average, at 18.1 percent. If Zillow's forecasts pan out and Sarasota sees a 0.7 percent increase in the median home values by the end of September, as well as mortgage rates at 5 percent -- it will take 19.5 percent of monthly income to pay the mortgage. At a rate of 6 percent, it takes almost 22 percent of monthly income. The median income here is $45,546.

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