How do interest rate changes affect real estate affordability?
How do interest rate changes affect real estate affordability?
Interest rate changes significantly impact real estate affordability by influencing monthly mortgage payments. When interest rates rise, the cost of borrowing increases, making homes less affordable for buyers. Conversely, lower interest rates reduce mortgage payments, enabling buyers to afford higher-priced properties. For example, a slight increase in interest rates could mean hundreds of dollars more in monthly costs, potentially pricing some buyers out of the market. Monitoring rate trends is crucial for buyers looking to maximize their purchasing power.