Why housing costs are rising. Yes, rising.
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I’m fully aware that, in general, home prices are falling sharply. But the recent run-up in mortgage rates is driving up the cost of homeownership (Work with me; one sign of intelligence is the ability to hold in your head two opposing ideas). From Zillow.com this morning: ‘... the average Los Angeles area homeowner will pay $2,280 more on their mortgage per year with today’s interest rates vs. if they had bought just two months ago.’
Here’s how Zillow breaks that down: ‘Los Angeles area mortgage APR’s on a 30-year fixed loan, to a borrower with good or better credit (credit score of 680+), have risen from 5.75% in April to 6.51% in June. In real dollars, this means a buyer in Los Angeles who purchased a $482,500 home (area median home value), with 20% down, would have paid $2,253/ month on a loan secured at this rate in April, vs. paying $2,442/month on a loan secured in June.’
More, from Zillow: That’s a difference of $190 more per month -– which translates into $2,280/ year, or $68,400 over 30 years...’