There is a lot of talk right now and the market has been significantly impact in terms of showings, contracts (both of which are way down) due to the rise in interest rates.

I wanted to share the ‘so what’ of these rates. Why are these so important?

Let’s take a look at a $375K home at a hypothetical 4% rate. That home would mortgage, with taxes and insurance, for approximately $2,100.

Let’s take a look at the same home with a 6% rate. At this rate, the home mortgages for about $2,571. In the last couple of months, the same home will now have a $470 increased monthly payment.

This is the so what, this is why the market has slowed dramatically. Inventory is also rising as sales have slowed. The logical outcome of this will be lower prices.

NOTE: The rates discussed here are not an offer to lend. I am not a lender. Talk to your lender please about specific rates.