DC Homeowners Spend 32 Percent of Income on Mortgages
✉️ Want to forward this article? Click here.
A new study by Zillow shows that homeowners in the DC area spent 17.8 percent of their income on their mortgages in the fourth quarter of 2017. Historically (from 1985 to 2000), that percentage was notably higher at 22.3 percent, but rising interest rates could be moving the region back to percentages that high.
Zillow's analysis predicts that once mortgage rates hit 5 percent, homebuyers will spend 20.2 percent of their income on their monthly mortgage. If rates were to rise as high as 7 percent, homebuyers will be spending 25.1 percent of their income on mortgages — nearly as much as area renters currently spend on housing (25.9 percent).
story continues below
loading...story continues above
In DC proper, homeowners are already spending a significant chunk of their income on home payments, jumping from 29.9 percent in 2015 to 32.5 percent at the end of last year.
The study assumes that homeowners earn the area median income and own a median-priced house with a 20 percent down-payment on a 30-year, fixed-rate mortgage.
See other articles related to: affordability, mortgage rates, mortgages, zillow
This article originally published at https://dc.urbanturf.com/articles/blog/rising-mortgage-rates-threaten-to-make-owning-as-expensive-as-renting/13696.
Most Popular... This Week • Last 30 Days • Ever
In this edition of First-Timer Primer, we look at the ins and outs of the 203k loan.... read »
The largest residential conversion planned in the neighborhood is continuing to move ... read »
Plans for the large new residential project are looking to get started again after mo... read »
The residential pipeline in Adams Morgan has slowed in recent years, and now there ar... read »
The Wall Street Journal is reporting that Jeff Skoll has purchased two homes on nine ... read »
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro