Would-be homebuyers are seeing their potential monthly mortgage payments creeping upward even though median home prices are holding steady inside the Beltway and dropping in farther-out areas.
The annual percentage rate for Washington-area mortgages has jumped from 5.88 percent in mid-April to 6.43 percent in the beginning of June, according to Zillow, an online company that provides mortgage quotes from lenders and property appraisal estimates.
Though the increase in the actual APR was actually one of the lowest among the 40 largest metropolitan statistical areas, the Washington region ranked 12th for the greatest monthly increase in mortgage
payments.
In an area such as Washington, which has more expensive homes to begin with, a “slight change in APR makes a much more dramatic difference” in the monthly mortgage payment, said Amy Bohutinsky, director of communications for Zillow.
Zillow calculated the figures for a 30-year fixed loan for someone with good or better credit (credit score above 680).
The online company used its median prices for the first quarter from each metropolitan area, and deducted 20 percent as the down payment.
The APRs from each of the 40 markets were averaged from more than 25,000 loan quotes given to prospective borrowers from April 13-19 and June 4-10 from just under 3,000 lenders on Zillow’s site.
In the Washington area, the monthly mortgage payment rose $111.25. The median price for a home in the Washington metropolitan statistical area — which includes farther-out areas such as Clarke, Fauquier, Spotsylvania, Stafford and Warren counties in Virginia — was $387,000, according to Zillow.
Payments in other parts of the country are going up as well. San Jose, Calif., topped the list, with a $277.78 increase on a median home price of $688,000. Pittsburgh saw the smallest dollar increase, with only a $42.04 jump on a median home price of $105,500.
This increase doesn’t appear to be having a significant effect on homebuyers yet. The number “has to be higher before it becomes a factor,” said Donna Evers, president and broker of Washington-based Evers & Company Real Estate. This may happen if the APR gets up in the 7 percent range, she said, but it’s “too hard to tell” if or when this will happen, she said.
