Purchasing Power and Sacrifice

    Are you thinking of buying a home but worried about the low inventory and pricing on homes? Many buyers are considering waiting to purchase a home for housing prices to come down. While at first thought this sounds like a good idea here’s another thing to think about – Purchasing Power!

    Purchasing power lowers as interest rates rise. 

    So, what does this mean to consumers… As you can see from the graphic below there are 4 different scenarios where each owner has a $1,415 monthly mortgage payment. However they did not get the same amount of house for that same monthly payment depending on the interest rate. Buying a home now with an average 4% interest rate could get you a home valued at $329,320. Soon the interest rates are going to rise. How fast and how much we can’t be completely sure just yet. So let’s say you were to wait and get a home in a few years when housing prices have stabilized or dropped and interest rates have increased to 5.5%. If you wanted to have the same monthly payment at $1,415 (assuming your income and finances have stayed relatively the same) you would only be able to afford a home valued at $276,903. That’s a difference of over $50,000 worth of actual home.

    Purchasing power in a home could mean the difference of a garage, a finished basement, a large or fenced yard, upgraded kitchens and baths, desired square footage or preferred neighborhood, or some other specification on your wish list for your dream house. Is it really worth giving up these qualities in your future home in hopes of getting a better deal?

    purchasing-power-graphic

    Contact us today to take advantage of historically low interest rates before they rise even more 801-966-4000

    It doesn’t matter if you are wanting to build or look at existing homes, interest rates have a big affect on your purchasing power and can make a significant difference in the quality of home you are able to afford. For questions on what kind of home and interest rate you qualify for contact your goBE Neighborhood Expert and they can get you in touch with a preferred lender.

    The Utah Dave Team was the number one Sales Team in Salt Lake County according to Zillow. Also, according to Zillow, we were the top sales team in the state.  Now, there are areas that we don’t service but we know the top neighborhood expert in each area in the state and can refer you to the perfect expert for you.

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