A question that most agents hear daily is “has the market hit the bottom yet” and we tend to have mixed opinions, but the real question should be, “what is next for interest rates?”
Here is an article that takes a look at interest rates for the month of June and this month….
There is a rule of thumb in which 1% increase in rates cases 10% decrease in affordability. For example…
Interest rates at 4.5% and your qualified for a $100,000 mortgage.
Interest rates at 5.5% you would only be qualified for a $90,000 mortgage.
Doesn’t seem like much but when you start looking at higher priced homes you see the difference.
Interest rates at 4.5% and your qualified for a $300,000 mortgage.
Interest rates at 5.5% and you’d only be qualified for a $270,000 mortgage.
If you are a potential buyer this is something to keep in mind because interest rates can not stay this low forever. So ask yourself, “What’s Next for Interest Rates?”