Mortgaged Home Prices Down 15% in Puerto Rico
El Vocero newspaper published an interesting article today about current mortgaged home prices in Puerto Rico, and where interest rates might be headed. The quoted professional said that prices are down 15% and that mortgage interest rates will soon rise above 8%.
The average mortgage interest rate in Puerto Rico right now is between 7.5% and 8%, about 1 percentage point higher than the continental USA. That difference is normal. Rates are always higher in Puerto Rico by about that amount. Because of that difference, many second home buyers in Puerto Rico will often take out a home equity loan on their primary residence and use that cash for a quicker close here in Puerto Rico.
It is expected that mortgage interest rates in Puerto Rico will go above 8% as the Fed is expected to raise rates later this week.
Meanwhile, the price of mortgaged homes in PR has dropped 15%, and the mortgage industry expert quoted in the article expects that prices will level off from here. She did not give the time metrics for the decrease, but I’m guessing she means to say that mortgaged-prices are down 15% year-over-year? This decrease in price is typical during a time of rising interest rates. As interest rates level off or drop down, we can expect an increase in prices again as demand from buyers will no doubt increase.
Here is a link to the full article:
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