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Priced Out: Where Higher Rates Could Hurt Home Buyers Most

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

Photograph by SIME/eStock

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Pain at 5%: Honolulu

Monthly income devoted to mortgage bill:

• historic average: 37.5%

• at 5% interest rate: 39.6%

Strong interest from wealthy investors and tourists worldwide has kept Honolulu unaffordable for the average resident. As of 2013's third quarter, people making around the median annual income of $72,676 here would need to devote 36.8 percent of their monthly income to pay the mortgage. While that's below the 37.5 percent historic average, a rise in mortgage rates to 5 percent sends that to 39.6 percent; at 6 percent the bite is 44.2 percent. The median value for a home at the end of 2013's third quarter was $535,800 and Zillow forecasts values will rise 4.2 percent by the end of this September.