Updating the chart shown here in How Fed Policy Distorts Home Prices from about six month ago we find that recently rising interest rates are making financing a home much more expensive – just when home prices are rising sharply. That same $1,100 mortgage payment from last December now buys about $18,000 less house as shown below.

According to Zillow report, 30-year mortgage now stand at about 3.9 percent, up more than a half percentage point from the low of around 3.3 percent late last year and as recently as a month ago. That works out to a mortgage of about $235,000 instead of $251,000 which, with ten percent down, buys a $$261,000 house instead of a $279,000 one.

Of course, this could just be the beginning…