Excerpt:
According to Mortgage News Daily, the interest rate on a 30-year fixed-rate mortgage for a prime borrower putting 20% down increased to 5.45% earlier this week from 3.14% a year ago. Such an increase would result in a 31.6% jump in the monthly principal and interest (P&I) payment on a mortgage with a fixed dollar amount. However, the increase in the monthly P&I payment for a typical home bought today compared to a year ago would be massively higher than 31.6%, as home prices nationally are up by over 20% from a year earlier, and by much more in many markets. In addition, that means a 20% down payment has risen sharply as well.
Below is a table showing the year-over-year increase in a 20% down payment and the P&I payment for a 30-year FRM for the US and for several metro areas on a “typical” single-family home. …
Click on table for larger image.
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It is not the absolute mortgage rate, rather the change in monthly payments that is causing the slowdown in the housing market.
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