Some folks in Denver have been waiting for the home prices to go down. Interest rates can cause home prices down, but the payments remain the same. So read on and then tell me what you think.
Since the election, rates have started going up and it will have a direct effect on the cost of housing. There is a rule of thumb that a ½% change in interest is approximately equal to 5% change in price.
As the interest rates go up, it will cost you more to live in the very same home or to keep the payment the same, you’ll have to buy a lower priced home.
Before rates rise too much may be the best time to buy a home whether you’re going to use it for your principal residence or a rental property. Low interest rates and lower prices make housing more affordable.
Here is a 200 year history of interest rates from FNMA:
It seems inevitable that rates will go up. How will that effect the Denver home prices? Denver is a +75,000 growth city every year. That requires 20,000 new housing units. Demand is still stronger than supply. Talk to me about your plans by calling 303-880-5585 ext 3.