With the Federal Reserve announcement today that it will be raising short-term interest rates by a quarter point — the first time it has done so since June 2006 — RealtyTrac took a look at the potential impact of rising interest rates.
RealtyTrac vice president and chief analyst Daren Blomquist, who notes that in the almost-impossible case that mortgage interest rates remain where they are, only 20 of the 582 counties RealtyTrac tracks, is homeownership "unaffordable" by their own historical measures. That changes of course as the rates step up. He writes:
The number of unaffordable counties rises to 76 counties (13 percent) if mortgage rates rise to 4.00 percent; to 91 counties (16 percent) if mortgage rise to 4.25 percent; to 111 counties (19 percent) if mortgage rates rise to 4.50 percent; and to 152 counties (26 percent) if mortgage rates rise to 5.00 percent.