Over the past year, the principal-and-interest mortgage payment on a median-priced home rose by nearly 9% while the U.S. median sale price rose about 6%. As of now, the CoreLogic Home Price Index forecast suggests that U.S. home prices will rise 6.2% year over year in February 2019, while a forecast based on multiple sources predicts a 13% gain in mortgage payments over the same period.

A consensus forecast suggests mortgage rates will rise by about 0.53 percentage points, or 53 “basis points,” between February 2018 and February 2019. The CoreLogic HPI Forecast suggests the median sale price will rise 4.5% in real terms over that same period (or 6.2% in nominal terms). Based on these projections, the inflation-adjusted typical mortgage payment would rise from $818 in February 2018 to $910 by February 2019, an 11.2% year-over-year gain. In nominal terms the typical mortgage payment’s year-over-year gain would be 13.0%.

At the same time, an IHS Markit forecast predicts only a 3% rise in real disposable income over the next year. Based on these results, home buyers are likely to see a greater share of their income go toward mortgage payments over this timeframe.

Read More