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.