Homebuyers Could See 15 Percent Hike in 'Typical Mortgage Payment' This Year

A new home price forecast says that the "typical mortgage payment" for new homebuyers could rise 15 percent by November 2018, while U.S. home prices are expected to rise less than 5 percent in that time.

From November 2017 to November 2018, the forecast suggests that the inflation-adjusted typical mortgage payment would increase by 13.3 percent, translating to a 15.5 percent gain year-over-year for the "typical mortgage payment" (the mortgage-rate-adjusted monthly payment based on each month’s U.S. median home sale price). The CoreLogic HPI Forecast also found that the median home sale price will increase by 4.6 percent nominally over the same period.

An IHS Markit forecast calls for real disposable income to rise by just under 4 percent this year, meaning homebuyers would see a larger chunk of their incomes devoted to mortgage payments. When adjusted for inflation the typical mortgage payment puts homebuyers’ current costs in the proper historical context.

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