Priced Out: Where Higher Rates Could Hurt Home Buyers Most

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

Photograph by Ocean/Corbis

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Pain at 5%: Portland

Monthly income devoted to mortgage bill:

• historic average: 21.5%

• at 5% interest rate: 23.7%

A robust regional economy and a hot seller's market have pushed affordability above its long-term average. At recent mortgage rates, the chunk of monthly pay going to the mortgage, at 21.9 percent in 2013’s third quarter, already tops the 21.5 percent historic average. If the median home value rises 4.6 percent by September, as Zillow expects, a 5 percent mortgage will eat up 23.7 percent of monthly income. A 6 percent rate on a mortgage will claim 26.5 percent of the monthly nut. The median income for Portland is $58,770, and the median home value as of September 2013 was $258,600. 

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