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“Interest Rate’s Relationship to Affordability of Buying a Home”

Reblogger
Real Estate Agent with Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 141871

This post has such important information in it.  Interest rates will be rising.  Read this post.  A 1% increase in interest rates can reduce your buying power by $50,000.00.  That's a major impact in the quality, size, etc of the home that you want to purchase.  With interest rates due to rise, do not waste time in your home buying quest.  

Original content by Joe Petrowsky NMLS # 6869

                                  “Interest Rate’s Relationship to Affordability of Buying a Home”

I speak to Realtors all the time about prospective buyers that just won’t get off the fence. They tell me clients may look from time to time and just won’t pull the trigger and buy and it is not because they can’t afford to buy, but they seem to be looking for what isn’t available.

There seems to be very little discussion about interest rates. A one percent increase in interest rates could mean $50,000 in buying powers, but apparently very few talk about the possible impact on buying power.

All markets are different, but in the states I do business I see anywhere from $100 per square foot to $2200 per square foot. I suppose that to some $50,000 in buying power doesn’t matter, but for most people it would make a big difference.

The cost of rent in most areas is going up faster than a mortgage payment. Wouldn’t it make more sense for someone to take advantage of a tax write off instead of continuing to collect rent slips?

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.

Comments (10)

William Johnson
Retired - La Jolla, CA
Retired

Hi Judi, A great re-blog. There are likely many reasons why there are so many choosing not to buy at a time when logically they would, with low rates and values increasing. Sadly , the immediate past affected more than just homeowners. It impacted families and others and the hesitations are real. The millennials are already in debt with education bills and they seem to be putting off home buying for a while. The Boomers are not downsizing at the rates expected and the jobs and wages are still a pretty serious issue. There just seems to be many reasons and logic is being put on the back burner. 

Apr 05, 2015 12:40 PM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Judi K Barrett - great re-blog - specially for those buyers who thinks 'it does not matter what is the interest rate' 

Apr 05, 2015 01:41 PM
Randy Mitchelson,APR
Marketing Advisor & Squeeze Mortgage - Bonita Springs, FL
First Impressions are made at First Click

Locking in a housing payment at today's low rates makes sense for those who plan on owning the property for the long-term. ARMs tied to LIBOR are still dropping though and although that trend can't last forever the economics of the EU are not promising in the foreseeable future.

Apr 05, 2015 02:37 PM
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Judi, I'm so glad you called our attention to Joe's post.  This is important information.

Apr 05, 2015 04:54 PM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Inventory is also limited and why home buyers who are ready to buy are finding it a little frustrating and difficult in finding what they want. 

Apr 05, 2015 06:03 PM
Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH
CRS

For some people, Yes, a slight fluctuation in interest rate might be just enough to get them a loan or just push it over to non-qualifying sitution.  This is not by design but happens occassinally

Apr 05, 2015 09:10 PM
Roy Kelley
Retired - Gaithersburg, MD

This is a very good selection for a re-blog. I also follow Joe's blogs.

Jun 19, 2015 05:21 AM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Judi

Your right on point mortgage interest rates do have a big impact on the affordability of what a buyer can afford when their buying a home.

Good luck and success.

Lou Ludwig

Jun 23, 2015 01:57 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Judi what a great re-blog from our friend Joe Petrowsky  most people do not get this...it is a huge break on the recovery...especially when this can stop an upward buyer from leaving his home....Endre

Sep 11, 2015 02:33 PM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Judi

Great choice for a re-post.

Good luck and success.

Lou Ludwig

Mar 27, 2016 12:07 PM