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Priced Out: Where Higher Rates Could Hurt Home Buyers Most

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

Photograph by Andy Alfaro/Modesto Bee/Zuma Press

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Pain at 6%: Modesto, Calif.

Monthly income devoted to mortgage bill:

• historic average: 23.4%

• at 6% interest rate: 27.3%

Home values in Modesto have risen by more than 30 percent annually. Affordability will become a problem if that continues. Zillow forecasts a 23.7 percent gain in the median home value by September, to $231,061. If mortgage rates hit 6 percent, it will take 27.3 percent of monthly income to pay the lender. The median income here is $48,721. 

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