Home buyers: Here's what higher mortgage rates will cost you in these cities

The recent jump in mortgage interest rates, along with the continued rise in home prices, has increased monthly costs for home buyers by 15 percent and reduced their purchasing power. That is an average, according to Zillow, but all real estate is local, and in some markets, the rise is even steeper.

The average rate on the popular 30-year fixed mortgage is almost a full percentage point higher today than it was a year ago. It recently crossed the 5 percent line. Home prices are up 6.5 percent from a year ago, according to Zillow, so looking nationally, monthly mortgage payments for the typical home are 15.4 percent higher than they were in August 2017. Two-thirds of that jump is from interest rates, one third from higher prices.

For the median-priced U.S. home, $216,700 in August per Zillow, a one percentage point increase to the current rate translates to about $1,200 more per year in mortgage payments when home prices remain the same. Climbing home values add to that increase.

"Home buyers and sellers have become accustomed to low rates, and there will be a bit of an adjustment period as the market adapts," said Aaron Terrazas, Zillow's senior economist. "Looking ahead, the impact of higher rates may slow the pace of home value growth, particularly in the nation's priciest markets. Buyers will face higher financing costs, but also could benefit from somewhat less frenetic competition."

Mortgage rates are largely national, but all real estate is local, and home values are rising at different rates in different cities. The jump in monthly payments is therefore higher in cities like Atlanta (+20 percent), Dallas, (+19 percent), Charlotte (+18 percent) and Seattle (+17 percent), where prices are still gaining fast, and lower in Washington, D.C (+12 percent), San Antonio (+13 percent) and Chicago (+13 percent), where price gains are cooling.

For home buyers who don't have a lot of wiggle room in their wallets, the rise in monthly payments will reduce the number of homes affordable to them in their local markets. A buyer with a $2500 monthly housing budget lost nearly $30,000 in purchasing power this year, according to Redfin, which also calculated the share of homes that would no longer be affordable.

With the jump from around 4 percent to 5 percent on the 30-year fixed, the number of homes affordable to the average buyer fell 12 percent in Boston, 16 percent in Los Angeles, 20 percent in San Diego, 17 percent in Seattle, and 11 percent in Denver.

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