Now that interest rates have risen from the 3.5% range to the 7% range, will home prices decline to balance out the purchasing power? Looking at historical evidence, it shows that sharply rising mortgage rates tend to slow home price appreciation and affect housing market activity. However, nominal price appreciation in most of Colorado remains […]
Rising interest rates decrease purchasing power
In general, as interest rates rise, the homebuyer loses about 3% of purchasing power for every .25% in interest rate increase. Today’s market is tough on first time buyers. The inventory of homes and condos purchased by first-time buyers continues to be low, and along with inflation, home prices are being pushed upward in […]
Rising mortgage rates…To lock or not lock? That is the question!
To lock or not to lock, that is the home buyer’s choice. However, buyers need to understand this is a commitment from both the mortgage lender and themselves to close at the agreed upon interest rate. (Photo: Pexels). Over the last several years we have enjoyed record-low mortgage rates with a sense of stability. The most […]
Homebuyers gain purchasing power with higher loan limits
It is very tough to “outsave” an appreciating real estate market. As 2021 begins, today’s homebuyers are frustrated with the scarce inventory of homes to choose from across all price ranges. Shrinking inventory has put upward pressure on home prices across the country. In fact, the Federal Housing Finance Agency (FHFA) determined that the average […]
Coronavirus and Mortgage Rates… To Lock or Not? That is the Question!
The odds that mortgage interest rates might go down because of the coronavirus crisis are pretty high. The odds that mortgage interest rates might go down because of the coronavirus crisis are pretty high. Yet rates are already at an historic low, so how low can they go? Over the last several years we have enjoyed […]