Last week, I uploaded a video talking about how a rise in interest rates leads to a decrease in a buyer’s purchasing power.
To put simply, the more money you need to spend on interest, the less you will be able to spend on the principle. So as interest rates go up, you will be able to afford less of a home.
To put simply, the more money you need to spend on interest, the less you will be able to spend on the principle. So as interest rates go up, you will be able to afford less of a home.
I got a lot of feedback from that video and the #1 question I received was “Suzy won’t rising interest rates cause home prices to fall?”
While we don’t have a crystal ball, if we look back to the market historically, rising interest rates haven’t caused home prices to come down at all.
If we look back over the last 3 decades, we have 4 instances where interest rates rose more than a full percentage point in less than a year. I all 4 instances, home prices continued to go up!
As a buyer or a seller, if you have any questions about the housing market, you can text or call me or drop me an email at any time.
If you’re ready to get pre-approved or refinance at today’s lower interest rates, we’ll put you in touch with one of our great lender partners.
If you’re a seller curious about your current home value, use the link in this email to get your instant home valuation. I will follow it up with a more detailed, no obligation home value report.
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