Mortgage Payments Could Go up 13 Percent in 2018

New data assessing housing market affordability show that annual home-price gains were over 6 percent in recent months, and mortgage payments increased approximately 11 percent over 2017 due to higher mortgage rates.

The CoreLogic Home Price Index forecast suggests the median sale price will rise about 3.0 percent between September 2017 and September 2018. Based on this data, the inflation-adjusted typical mortgage payment would see an 11.2 percent year-over-year gain, from $794 in September 2017 to $883 by September 2018, meaning the typical mortgage payment would rise 13.2 percent over the next year.

To measure the impact of inflation, mortgage rates, and home prices on affordability is to use the “typical mortgage payment," -- a mortgage-rate-adjusted monthly payment based on each month’s U.S. median home sale price, calculated using Freddie Mac’s average rate on a 30-year fixed-rate mortgage with a 20 percent down payment, not including taxes or insurance.

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