How much do rising rates affect purchasing power? 🤔

Mortgage rates have increased significantly this year. As mortgage rates rise, they impact purchasing power by raising the cost of buying a home and limiting how much one can comfortably afford.

Here’s how it works.

Let’s assume you want to keep your monthly payment about $4000 or $8000 (see charts), here’s how your purchasing power can change as mortgage rates climb.

As the charts show, as rates go up, the amount one can afford to borrow decreases and that may mean one has to look at homes at a different price point. If you were preapproved months ago, you may want to talk to your lender again.