The High Impact Of Low Interest Rates On Your Purchasing Power

The High Impact Of Low Interest Rates On Your Purchasing Power

The High Impact of Low Interest Rates on Your Purchasing Power | Simplifying The Market

The High Impact of Low Interest Rates on Your Purchasing Power

   First Time Home Buyers, For Buyers, Interest Rates, Move-Up Buyers

According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 3.96%, which is still near record lows in comparison to recent history!

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.

Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments between $1,850-$1,900 a month.

The High Impact of Low Interest Rates on Your Purchasing Power | Simplifying The Market

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

Act now to get the most house for your hard-earned money.



Connie White Headshot
Author:
Phone: 843-532-3356
Dated: July 20th 2017
Views: 97
About Connie: My personal venture into real estate was driven by the desire to provide an enjoyable environme...

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