Today you can buy a $1,000,000 home with a 20% Down
Payment on a 30 YR Fixed Rate @ 3.500% and your monthly
payment is $3600 principal & interest.
When interest rates increase you will have less buying power.
As rates increase the Sales Price decreases to keep monthly
payment at $3600 principal & interest:
3.750% $970,000 Sales Price
4.000% $940,000 Sales Price
4.250% $910,000 Sales Price
4.500% $885,000 Sales Price
4.750% $860,000 Sales Price
5.000% $835,000 Sales Price
So with 5% rate the buyers can buy only $835,000 vs $1,000,000
http://homevalue.ocluxuryprope...
