Increased Mortgage Interest Rates Can Significantly Decrease Your Home Purchasing Power


Increased Mortgage Interest Rates Can Significantly Decrease Your Home Purchasing Power
By Scott Rogers • June 28, 2022
If you have $2,000 per month in your budget for your mortgage payment, that budget won't allow you to buy quite the same house now as compared to six months ago. Six Months Ago = 3.22% Mortgage Interest Rate = $451,000 house Six months ago, you could purchase a $451,000 house in the City of Harrisonburg, put 20% down, finance the purchase with a 30 year fixed rate mortgage at 3.22%, pay your tax bill and homeowners insurance all for a smidge less than $2,000. Today = 5.81% Mortgage Interest Rate = $353,000 house Today, you can purchase a $353,000 house in the City of Harrisonburg, put 20% down, finance the purchase with a 30 year fixed rate mortgage at 5.81%, pay your tax bill and homeowners insurance all for slightly less than $2,000. $98,000 of Purchasing Power... Gone! As such, if you have a fixed budget for your housing costs, you have lost $98,000 of purchasing power over the past six months given the increased interest rates. But Remember... Six months ago, plenty of buyers with a $2,000 budget may have been buying $353K houses... not $451K houses... so for some buyers the increased monthly costs are likely painful, but may not change their purchasing decisions. -- This article was inspired by an even more thorough analysis of this dynamic over here. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 23, 2024 (unless otherwise noted).
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