Mortgage rates climb. How is this going to impact buyers?

By
Real Estate Broker/Owner with Broker Associate / Team Lead - Texas Pride Realty Group 0503820 TX

Image that you're in a grocery store and everything you want to purchase is on the top shelf.  The lower shelves have been full for a few years, but now, they're bare.  And you're not as tall as you think you were.   That's how interest rates work in a nutshell.  Your ability to reach up and get that perfect house is changing.  

Now, let's look at history.  A 5% interest rate is historically low.  It is still worth buying a home.  We have inventory at all price points, but we need to have patience.  We need to submit multiple offers and not give up the inspection unless absolutely necessary.  

Money.com shows the effect of interest rates on buying power this way:

"If you bought a $250,000 home and made a 20% down payment — $50,000 — you would end up with a starting loan balance of $200,000. On a $200,000 home loan with a fixed rate for 30 years:

  • At 3% interest rate = $843 in monthly payments (not including taxes, insurance, or HOA fees)
  • At 4% interest rate = $955 in monthly payments (not including taxes, insurance, or HOA fees)
  • At 6% interest rate = $1,199 in monthly payments (not including taxes, insurance, or HOA fees)
  • At 8% interest rate = $1,468 in monthly payments (not including taxes, insurance, or HOA fees)"

 

If you have any questions about how much you can purchase then let's get you in touch with a great lender.  We have several we can refer to you.  It's time to get into the wealth ladder of home ownership.

Interested in Coppell Texas?  Here's what $400,000 can purchase in Coppell TX right now.  

Comments (3)

Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It’ll probably hit the coast first and then the northwest and go from there, but anything else, I have no idea

Apr 23, 2022 11:34 PM
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse Advisor

More than 50% of my deals are all cash purchases, while a large portion of the remaining buyers are putting down 30%-70%. While there are individual buyers the rising rates will impact- it's not a large portion of the buyer pool in Manhattan. 

Apr 24, 2022 11:36 AM
Bob McCranie
Broker Associate / Team Lead - Texas Pride Realty Group - Carrollton, TX
Your best advocate when buying or selling your hom

In DFW, 24.7% were cash sales in March

Apr 24, 2022 12:58 PM