Last month we reported that the average selling price in the foothills area was a whisker shy of $625,000. If we use that figure and calculate what a buyer who puts 20% ($125,000) down and secures a 30-year $500,000 mortgage at today’s interest rate of 5%, the monthly principle and interest payment is $2,684.

The Fed is expected to raise short-term interest rates ¼% one more time this year and another 4 times next year. Assuming the rate for the same $500,000 mortgage will be 1% higher a year from now, at 6%, the monthly P&I payment will be $2,998.

The difference in the two payments is $314, and assuming the mortgage is paid off as agreed, a home purchased next year will cost more than $113,000 in interest payments over the 30-year term. And this assumes that home prices will remain the same over the next year, which they won’t—they will continue to rise, but probably not as fast as they have over the last decade.

The takeaway is that you will need to show more income to qualify for next year’s loan and you will pay more over the life of the loan. ‘nuff said?