We asked a mortgage banker what the effect would be if interest rates rose by one percent. He said that, all other things being equal, a one percent increase in interest would reduce the purchasing power by over $53,000!
What this means is that you might be able to afford a $500,000 home now, but if rates increase by one percent, you might only be able to afford a $447,000 home.
If you’re in the market, you should consider buying now, before the inevitable interest rate increase.
-Darryl Grosjean, Managing Broker, Basalt Realty