Interest rates are the hottest topic in the real estate world right now. They’re rising fast; We’ve seen them climb well over 1% this year alone. What does this mean for you as a buyer?
For every 1% that interest rates go up, your purchasing power is decreased by 10%. If you were looking at a $400,000 home at 3.5%, you’ll only be able to afford $360,000 at 4.5% today.
This impacts sellers, too. With decreased affordability, there won’t be as many buyers looking at your home.
If you’re on the fence about buying, now is the time to get off. The Federal Reserve has already said they could increase rates six more times this year alone. The biggest way to impact and reduce inflation is by increasing these rates, so expect them to continue rising.
If you have any questions about buying, interest rates, or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.
Teaser: Interest rates are rising quickly. They’ve gone up by 1% this year alone. This impacts both buyers and sellers. For buyers, a 1% increase in rates represents a 10% drop in purchasing power. To learn more, watch this short video.