Why Low Interest Rates Are Good For Home Sellers
Today’s Low Interest Rates Mean More Buyers Are Available To Buy Your House
Let’s use as an example a mortgage amount of $225,000.
At today’s interest rate of 3.65%, the monthly payment would be $1,029.28.
We know that interest rates won’t be this low forever.
Let’s say they rise by one percent.
At the interest rate of 4.65%, the monthly payment would be $1,160.18.
In other words, it would cost a potential home buyer an additional $130.90 per month to buy the same house at the same price.
Do you think the additional $130.90 a month will prevent some buyers from buying that particular house?
Will they go for a less expensive house, or stop looking altogether?
The bottom line is that low interest rates are good for home sellers because they increase the number of buyers who are able to buy homes. When interest rates increase, there simply will be fewer buyers able to buy.
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