I break down how rising interest rates affect both buyers and sellers.

As many of you have heard, mortgage interest rates are on the rise. They’ve jumped up significantly since the beginning of this year. There are many factors involved in determining someone's buying power. Mortgage rates are just one element, but they're an important one to pay attention to. Today I'll break down what rates are doing and how they can impact you whether you're buying, selling, or investing in real estate.

According to a recent survey, the average 30-year fixed-rate mortgage was around 3.22% at the start of this year. It’s now close to 4%, depending on price, credit score, and other factors. This is important because rates can affect your buying power. Take a look at the table at 1:12 in the video. You’ll see that the monthly payment on a $400,000 home with a 3.5% interest rate and 10% down would be approximately $1,796. If interest rates rise just 0.5%, that same home would cost you $1,910 per month. If you wanted to keep your monthly payment under $1,800, you’d only be able to buy a $360,000 home.

Mortgage rates are still historically low.

If you are thinking about buying a home, you should connect with a knowledgeable and trusted real estate agent and mortgage lender soon so you can understand your buying power in today's market. They’ll help you create a plan and know what you can afford before you start looking for a home. 

If you're thinking of selling your home, understand that rising mortgage rates may shrink the pool of qualified buyers. This may have an impact on how much your home can actually sell for. Buyers’ purchasing power can change depending on what interest rate they qualify for.

Mortgage rates are still historically low. Even a 4% interest rate is still well below what we saw in decades past. It's still a good time to buy or sell a home, but only if you find the right deal that works for you. If you're concerned about how rates can affect your ability to buy, sell, or invest in real estate this year or if you have any other questions, contact me by phone or email for a free no-obligation consultation. I look forward to hearing from you.