Study: Mortgage rates put pressure on home prices

Credit crunch makes homes 10-20% costlier

Dysfunction in the mortgage markets has made borrowing more expensive and increased the cost of owning a home by 10 to 20 percent — a situation that is putting more downward pressure on home prices.

That’s the conclusion of new research by Columbia Business School real estate professor Chris Mayer, who looked at the relationship between home prices and the "spread" between mortgage rates and 10-year Treasury notes.