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Around The Lake

Discover All You Need To Know About Real Estate And Our Surrounding Communities



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What Experts Say Will Happen with Home Prices Next Year Experts are starting to make their 2023 home price forecasts. As they do, most agree...
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If recent headlines about the housing market cooling and buyer demand moderating have you worried you’ve missed your chance to sell, here’s what you need to...
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According to the U.S. Census Bureau, this year, builders are on pace to complete more than a million new homes in this country. If you’ve had trouble finding...
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One of the top stories in recent real estate headlines was the intensity and frequency of bidding wars. With so many buyers looking to purchase...
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If you’re thinking about buying a home, you likely have a lot of factors on your mind. You’re weighing your own needs against higher mortgage rates, today’s...
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If you’re thinking about selling your house, you may have heard about the housing market slowing down in recent months. While it’s still a sellers’ market,...
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The desire to own a home is still strong today. In fact, according to the Census, the U.S. homeownership rate is on the rise. To illustrate the increase,...
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There’s no doubt about the fact that the housing market is slowing from the frenzy we saw over the past two years. But what does that mean...
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Mortgage rates are much higher today than they were at the beginning of the year, and that’s had a clear impact on the housing market. As...
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If you’re thinking about making a move, you probably want to know what’s going to happen to home prices for the rest of the year. While experts say price...
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If you’ve been thinking about buying a home, you likely have one question on the top of your mind: should I buy right now, or should I...
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The housing market is at a turning point, and if you’re thinking of buying or selling a home, that may leave you wondering: is it still a good...
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You may be someone who looks forward to summer each year because it gives you an opportunity to rest, unwind, and enjoy more quality time...
If you’re thinking of buying or selling a home, chances are you’re focusing on the many extraordinary ways it’ll change your life. But do you know it has a...
According to a recent survey from the National Association of Realtors (NAR), one of the top challenges buyers face in today’s housing market is finding a home that meets their needs....
Many people are wondering: will home prices fall this year? Whether you’re a potential homebuyer, seller, or both, the answer to this question matters for you. Let’s break down what’s happening...
If you’re planning to buy a home, it’s critical to understand the relationship between mortgage rates and your purchasing power. Purchasing power is the amount of home...
With a limited number of homes for sale today and so many buyers looking to make a purchase before mortgage rates rise further, bidding wars are common. According to the latest report from...
If you’re following along with the news today, you’ve likely heard about rising inflation. You’re also likely feeling the impact in your day-to-day life as...
If you’re buying or selling a home this year, you’re likely saving up for a variety of expenses. For buyers, that might include things like your down...
Many consumers are wondering what will happen with home values over the next few years. Some are concerned that the recent run-up in home prices will...
Are you thinking about selling your house? If so, you may want to make it a priority to start the process soon. According to realtor.com, the sweet spot...
If you’re ready to move up, you may be trying to decide whether you want to buy a home that's already on the market or build...
If you’re thinking of selling your house this year, timing is crucial. After all, you’ll want to balance getting the most out of the sale of your...



If you’re planning to buy a home, it’s critical to understand the relationship between mortgage rates and your purchasing power. Purchasing power is the amount of home you can afford to buy that’s within your financial reach. Mortgage rates directly impact the monthly payment you’ll have on the home you purchase. So, when rates rise, so does the monthly payment you’re able to lock in on your home loan. In a rising-rate environment like we’re in today, that could limit your future purchasing power.

Today, the average 30-year fixed mortgage rate is above 5%, and in the near term, experts say that’ll likely go up in the months ahead. You have the opportunity to get ahead of that increase if you buy now before that impacts your purchasing power.

Mortgage Rates Play a Large Role in Your Home Search

The chart below can help you understand the general relationship between mortgage rates and a typical monthly mortgage payment within a range of loan amounts. Let’s say your budget allows for a monthly mortgage payment in the $2,100-$2,200 range. The green in the chart indicates a payment within that range, while the red is a payment that exceeds it (see chart below):

As the chart shows, you’re more likely to exceed your target payment range as mortgage rates increase unless you pursue a lower home loan amount. If you’re ready to buy a home, use this as your motivation to purchase now so you can get ahead of rising rates before you have to make the decision to decrease what you borrow in order to stay comfortably within your budget.

Work with Trusted Advisors To Know Your Budget and Make a Plan

It’s critical to keep your budget top of mind as you’re searching for a home. Danielle Hale, Chief Economist at realtor.com, puts it best, advising that buyers should:

Get preapproved with where rates are today, but also consider what would happen if rates were to go up, say another quarter of a point, . . . Know what that would do to your monthly costs and how comfortable you are with that, so that if rates do move higher, you already know how you need to adjust in response.”

No matter what, the best strategy is to work with your real estate advisor and a trusted lender to create a plan that takes rising mortgage rates into consideration. Together, you can look at your budget based on where rates are today and craft a strategy so you’re ready to adjust as rates change.

Bottom Line

Even small increases in mortgage rates can impact your purchasing power. If you’re in the process of buying a home, it’s more important than ever to have a strong plan. Let’s connect so you have a trusted real estate advisor and a lender on your side who can help you strategize to achieve your dream of homeownership this season.

May 11, 2022

How Today’s Mortgage Rates Impact Your Home Purchase

If you’re planning to buy a home, it’s critical to understand the relationship between mortgage rates and your purchasing power. Purchasing power is the amount of home you can afford to buy that’s within your financial reach…