How Current Interest Rates Can Have a High Impact on Your Purchasing Power

Tuesday, May 22, 2018   /   by Nicole Solari

How Current Interest Rates Can Have a High Impact on Your Purchasing Power



How Current Interest Rates Can Have a High Impact on Your Purchasing Power


According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 4.61%, which is still near record lows in comparison to recent history!


The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.


Purchasing power, simply put, is the amount of home you can afford to buy for the budget you have available to spend. As rates increase, the price of the house you can afford to buy will decrease if you plan to stay within a certain monthly housing budget.


The chart below shows the impact that rising interest rates would have if you planned to purchase a home within the national median price range while keeping your principal and interest payments between $1,850-$1,900 a month.


How Current Interest Rates Can Have a High Impact on Your Purchasing Power | Keeping Current Matters


With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.


Act now to get the most house for your hard-earned money.


  real estate, home ownership, homebuyers, real estate agent, homes for sale, buying, realtor, selling, finances, first time home buyer, moving, upgrades, open house

The Solari Group
Nicole Solari
DRE# 02014153

Solano Location
4820 Business Center Drive, Ste 140
Fairfield, CA 94534
707-486-5400

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1700 2nd Street Suite 222
Napa, CA 94559
707-819-9119

IDX Content is provided via the Internet for consumers’ personal, non-commercial use. Variable Price’ indicates the seller is willing to entertain offers within a Listing Price Range. All measurements and all calculations of area are approximate. Information provided by Seller/Other sources, not verified by Broker. All interested persons should independently verify accuracy of information. Provided properties may or may not be listed by the office/agent presenting the information. IDX provided by Commissions Inc. Data last updated:February 29, 2020