Rising mortgage interest rates prevent first-time buyers from qualifying for a loan
AMARILLO, Texas (KFDA) — Rising mortgage interest rates are pushing potential first-time home buyers out of the market.
Rising house prices, rising mortgage rates, limited supply and demand ultimately increase the total monthly mortgage payment.
With rates significantly higher than a year ago, it is extremely difficult for first-time home buyers to access property.
“For Amarillo, the starting home price, increasing mortgage interest rates from 3% to 5.5% actually results in about a $7,000 increase in the income required to qualify for a mortgage. said Clare Losey, Ph.D, assistant research economist, Texas Real Estate Research Center, Texas A&M University.
“The Texas Real Estate Research Center estimates that in Amarillo in April 2022, 40% of potential first-time buyers could qualify for a mortgage for a mansion with a mortgage interest rate of 3%. This figure drops to just 32% of potential first-time buyers with a rate of 5.5%,” said Clare Losey. “In Amarillo, the income required to qualify for a mortgage increased from $39,000 at a mortgage interest rate of 3% to $46,000 at a rate of 5.5% in April 2022.”
Losey says the price of a first home in Amarillo in April 2022 was around $149,000.
As mortgage interest rates rise, homebuyers can expect to see higher monthly payments on a loan amount.
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