We often talk about how we are at historic lows when it comes to interest rates. In this chart created by Keeping Current Matters, we see what that actually means. Looking back over the last few decades, we see some pretty high rates in the 80's. Can you imagine buying a home with an 18% interest rate?
As interest rates rise it affects people's buying power in a couple of ways. For some, an increase in interest rates can push their income to debt ratio to a point where they no longer qualify for a loan. Others may qualify for lower loans amounts than they had previously. With the low inventory and the increase of prices on homes, we will see some buyers being priced out of the market. Meaning they just may not be able to find a home in the lower price points.
In a 2017 blog by moneyunder30.com, we found the following chart which shows how a 1% change in interest can affect your monthly mortgage payment.
It's still a great time to buy and sell real estate in Boise Idaho. With home values continuing to move up and interest rates still low, it's a good time to be in the real estate market.
We have agents and lenders standing by to help you through this process if you have any questions, concerns or comments, please reach out and let us know.
blog pic at top was provided by PhotoMIX Ltd. from Pexels