What would higher mortgage rates mean for Houston housing?



CONTINUE to see Houston's most beautiful homes of 2018. FILE - In this Oct 2, 2018, file photo a for sale sign stands outside a home on the market in the north Denver suburb of Thornton, Colo.

CONTINUE to see Houston's most beautiful homes of 2018. FILE - In this Oct 2, 2018, file photo a for sale sign stands outside a home on the market in the north Denver suburb of Thornton, Colo. Photo: David Zalubowski, Associated Press Photo: David Zalubowski, Associated Press Image 1 of / 1 Caption Close What would higher mortgage rates mean for Houston housing? 1 / 1 Back to Gallery

Long-term mortgage rates have fallen to a four-month low according to mortgage-finance company Freddie Mac's weekly survey of rates.

But some economists predict they will rise once more over the upcoming year.

What does that mean for homebuyers?

Zillow calculated that mortgage rates increase to 5.5 percent, the share of Houston homes that are affordable to a median-income household will drop from 71 to 65 percent.

FOUR-MONTH LOW: Mortgage rates fall, potentially helping home sales

Mortgage rates are "taking a big bite out of home shoppers' budgets and slicing the share of homes available to those looking to buy," said the report.

The cities most impacted by the rise in interest rates are on the West Coast, where only a sliver of homes is affordable to begin with. In Los Angeles and San Diego, over a quarter of the homes that are currently affordable to a median-earning household would be pushed out of reach by the increase in mortgage rates.

For cities where affordability is not as pressing of an issue, a rise in mortgage rates will not have as profound of an impact. For example, in Cleveland and Pittsburgh, where over 80 percent of homes on the market are affordable to a median-income family, a 5.5 percent interest rate would only push two percent of homes out of reach.