{"id":21531,"date":"2012-09-20T17:46:29","date_gmt":"2012-09-21T00:46:29","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=21531"},"modified":"2012-09-20T17:46:29","modified_gmt":"2012-09-21T00:46:29","slug":"how-would-6-mortage-rates-affect-affordability","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/","title":{"rendered":"How Would 6% Mortage Rates Affect Affordability?"},"content":{"rendered":"

In the comments on yesterday’s post, reader “Topdog” posed the following question<\/a>:<\/p>\n

So the Fed stops playing funny money, lets interest float to market rate. Lets say a reasonable 3% premium plus the 3% inflation premium which puts high quality new mortgages at about 6%. How does that affect buyer affordability?<\/p><\/blockquote>\n

That’s a question we have addressed on these pages before, but it has been a few months since the last update<\/a>, so here’s the latest chart of the affordability index, along with an indicator of where we would be if mortgage interest rates rose to 6% but home prices and incomes stayed at today’s levels.<\/p>\n

\"King<\/a><\/p>\n

If interest rates suddenly jumped to 6%, affordability would drop below the pre-bubble average, but would actually still be better than it was through the worst of the bubble between 2005 and 2008.<\/p>\n

Of course, everyone has been predicting that interest rates will rise for at least the last three years, all while they have continued to drop. Eventually they will go up, but it will probably be a gradual climb, and by the time they get to 6%, incomes will also be higher. Barring another real estate bubble, I doubt we’ll see the affordability index drop below 100 in the next few years, or even when rates do finally start to go back up.<\/p>\n","protected":false},"excerpt":{"rendered":"

In the comments on yesterday’s post, reader “Topdog” posed the following question: So the Fed stops playing funny money, lets interest float to market rate. Lets say a reasonable 3% premium plus the 3% inflation premium which puts high quality new mortgages at about 6%. How does that affect buyer affordability? That’s a question we…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[8,616],"tags":[28,704,61,223],"coauthors":[],"class_list":["post-21531","post","type-post","status-publish","format-standard","hentry","category-stats","category-counties","tag-affordability","tag-big-picture","tag-fundamentals","tag-interest-rates"],"yoast_head":"\nHow Would 6% Mortage Rates Affect Affordability? \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"How Would 6% Mortage Rates Affect Affordability? \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"In the comments on yesterday’s post, reader “Topdog” posed the following question: So the Fed stops playing funny money, lets interest float to market rate. Lets say a reasonable 3% premium plus the 3% inflation premium which puts high quality new mortgages at about 6%. How does that affect buyer affordability? That’s a question we...\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/09\/Affordability-Index_2012-08.png\" \/>\n<meta name=\"twitter:creator\" content=\"@The_Tim\" \/>\n<meta name=\"twitter:site\" content=\"@SeattleBubble\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"The Tim\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/\",\"url\":\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/\",\"name\":\"How Would 6% Mortage Rates Affect Affordability? \u2022 Seattle Bubble\",\"isPartOf\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#primaryimage\"},\"thumbnailUrl\":\"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/09\/Affordability-Index_2012-08-600x435.png\",\"datePublished\":\"2012-09-21T00:46:29+00:00\",\"author\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f\"},\"breadcrumb\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#primaryimage\",\"url\":\"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/09\/Affordability-Index_2012-08.png\",\"contentUrl\":\"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/09\/Affordability-Index_2012-08.png\",\"width\":\"910\",\"height\":\"661\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/seattlebubble.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"How Would 6% Mortage Rates Affect Affordability?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#website\",\"url\":\"https:\/\/seattlebubble.com\/blog\/\",\"name\":\"Seattle Bubble\",\"description\":\"local\u00a0real\u00a0estate\u00a0news, statistics,\u00a0and\u00a0commentary without\u00a0the\u00a0sales\u00a0spin.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/seattlebubble.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f\",\"name\":\"The Tim\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/image\/37756956c11dcc50d2559761ffa5ee70\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g\",\"caption\":\"The Tim\"},\"description\":\"Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer \/ internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.\",\"sameAs\":[\"http:\/\/SeattleBubble.com\/\",\"http:\/\/facebook.com\/is.totally.pointless\",\"https:\/\/x.com\/The_Tim\"],\"url\":\"https:\/\/seattlebubble.com\/blog\/author\/timothyellis\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"How Would 6% Mortage Rates Affect Affordability? \u2022 Seattle Bubble","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/","twitter_card":"summary_large_image","twitter_title":"How Would 6% Mortage Rates Affect Affordability? \u2022 Seattle Bubble","twitter_description":"In the comments on yesterday’s post, reader “Topdog” posed the following question: So the Fed stops playing funny money, lets interest float to market rate. Lets say a reasonable 3% premium plus the 3% inflation premium which puts high quality new mortgages at about 6%. How does that affect buyer affordability? That’s a question we...","twitter_image":"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/09\/Affordability-Index_2012-08.png","twitter_creator":"@The_Tim","twitter_site":"@SeattleBubble","twitter_misc":{"Written by":"The Tim","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/","url":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/","name":"How Would 6% Mortage Rates Affect Affordability? \u2022 Seattle Bubble","isPartOf":{"@id":"https:\/\/seattlebubble.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#primaryimage"},"image":{"@id":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#primaryimage"},"thumbnailUrl":"http:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/09\/Affordability-Index_2012-08-600x435.png","datePublished":"2012-09-21T00:46:29+00:00","author":{"@id":"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f"},"breadcrumb":{"@id":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#primaryimage","url":"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/09\/Affordability-Index_2012-08.png","contentUrl":"https:\/\/seattlebubble.com\/blog\/wp-content\/uploads\/2012\/09\/Affordability-Index_2012-08.png","width":"910","height":"661"},{"@type":"BreadcrumbList","@id":"https:\/\/seattlebubble.com\/blog\/2012\/09\/20\/how-would-6-mortage-rates-affect-affordability\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/seattlebubble.com\/blog\/"},{"@type":"ListItem","position":2,"name":"How Would 6% Mortage Rates Affect Affordability?"}]},{"@type":"WebSite","@id":"https:\/\/seattlebubble.com\/blog\/#website","url":"https:\/\/seattlebubble.com\/blog\/","name":"Seattle Bubble","description":"local\u00a0real\u00a0estate\u00a0news, statistics,\u00a0and\u00a0commentary without\u00a0the\u00a0sales\u00a0spin.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/seattlebubble.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f","name":"The Tim","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/image\/37756956c11dcc50d2559761ffa5ee70","url":"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g","caption":"The Tim"},"description":"Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer \/ internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.","sameAs":["http:\/\/SeattleBubble.com\/","http:\/\/facebook.com\/is.totally.pointless","https:\/\/x.com\/The_Tim"],"url":"https:\/\/seattlebubble.com\/blog\/author\/timothyellis\/"}]}},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p6wh0F-5Bh","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/posts\/21531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/comments?post=21531"}],"version-history":[{"count":0,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/posts\/21531\/revisions"}],"wp:attachment":[{"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/media?parent=21531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/categories?post=21531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/tags?post=21531"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/seattlebubble.com\/blog\/wp-json\/wp\/v2\/coauthors?post=21531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}