How are rising interest rates affecting buyers and sellers in our market? We’re going to take a closer look today.
Let’s start off with how these rates are affecting buyers. Let’s say you are looking at a $200,000 purchase price and putting 10% down. At a rate of 4.5%, which is the current average rate, the payment would be $1,375 per month. If rates were to go up to 5.5%, that same buyer will qualify for $23,000 less with the same qualifications. If you’re thinking about buying a home in the next year, it might be a better time for you to do it sooner rather than later because of this.
How is this affecting sellers? Well, a majority of homebuyers (80% to 90%) are using financing to purchase a home. As you can see above, even a slight change in interest rates can have a huge effect on the affordability of homes, thus weakening the pool of buyers who are out there looking for a home like yours. They might not be able to afford it anymore after rates increase.
If you’re thinking about buying a home or selling a home in the next 12 to 18 months or you just have any questions, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.