Interest Rates have been rising, typically for every 1% the mortgage interest rates rise, your buying power drops by 10%. Meaning if they rise 1% the $250,000 House you would afford at today’s rate, your buying power will be decreased by $25,000 so you will only afford a $225,000 home.
This may not seem like much, however home values keep rising meaning you will not be living in the desired neighborhood or area you want by waiting.
- Interest rates are projected to increase steadily heading into 2019.
- The higher your interest rate, the more money you end up paying for your home and the higher your monthly payment will be.
- Rates are still low right now. Don’t wait until rates hit 5% to start searching for your dream home!