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  Mortgage Rates Rise. Will Home Prices Fall?

Mortgage rates are now almost at 5%, a huge jump compared to rates at 4% less than a year ago. This represents a $60 monthly increase on every $100K borrowed.

A home priced at $600k now costs an additional $360 more per month.

But will home prices fall?

Prices are based on supply and demand and whether new home buyers can afford the payments.

In my view, mortgage rates rule!

This means even if home buyers are willing to pay more, mortgage companies won't be able to qualify as many buyers for a property as before.

Sellers are likely to ask for the same price a home sold for a year ago down the street (at 4% interest rates). Our recommendation to buyers is to offer a starting price which matches the monthly payments calculated at 4% and then ask for a price reduction to match the same monthly payments but using 5% interest rates.

What are your thoughts with regards to rising mortgage rates?


TodayWeBuy - Question - 3M - 718 views
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