For those Southern California house hunters who have held back waiting for a price dip, here’s more bad news: Monthly payments for new buyers could rise as much as 20 percent by year’s end.
Mortgage insurer Arch MI studied what might happen if mortgage rates went to 5.1 percent by year’s end and other economic conditions stayed relatively strong. Nationally, a buyer eyeing the median-priced home in the fourth quarter could expect to pay $1,724 a month for a mortgage (with a 10 percent downpayment, which also means paying mortgage insurance), homeowners insurance and property taxes. If the Arch MI predictions are correct, that would represent a one-year hike of 17 percent — including a 5.1 percent jump in the selling price.
Locally, the pain would be slightly worse. Here’s how Southern California markets would fare in Arch MI’s 2018 rising-rate scenario, and how the impact ranks among the 15 markets tracked.
Los Angeles County: Forecast shows house payments could rise 20 percent to $3,775 monthly — ranking No. 3 highest among the 15 big markets tracked. One key: Prices are predicted to rise 7.5 percent, the No. 1 increase in these big markets.
Riverside and San Bernardino counties: New house payments could rise to $2,285, ranked eighth highest in the study, up 19 percent for 2018. That included Inland Empire prices surging 5.9 percent, the No. 6 increase.
Orange County: A buyer’s payment could rise 18 percent to $5,276 — the highest payment found among the 15 metros. That includes selling prices rising 5.7 percent, the No. 8 increase.