Health & Fitness
Chart: Home affordability and the impact of rising mortgage rates!
The chart in this article clearly illustrates what most people who are in the market to buy real estate are already keenly aware of. That for every 1/4% increase in the mortgage rate, the amount of house that they will be able to afford is...
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This article is from the pages of the Hallmark Abstract Service, New York website.
The impact that an increase in mortgage rates has on real estate affordability, also known as purchasing power, is a concept extremely familiar to most prospective buyers who watch them on a daily basis until they are locked-in!
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The chart illustrates the point by showing how a 25 basis point increase in the mortgage rate for someone with a specific maximum monthly principal and interest payment in mind will impact the price of the house that they can afford.
In this case the desired ‘monthly nut’ is in the ballpark range of $2,044 and, as the mortgage rate increases from 4.50% to 5.50%, the price of the house that fits the payment criteria drops by $40,000.
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