Mortgage rates just hit 5%. Buying a home has become a lot more expensive

Re:Mortgage rates just hit 5%. Buying a home has become a lo... by ldiracdelta on Friday April 08, 2022 @10:35AM (#30957360)

No it hasn't become more expensive due to hitting 5%, though it may be more expensive for other reasons. The market will equilabrate.

There's a couple who live at the peak of the bell curve that defines your market. They can spend $X,000 per month on a house. 2.5% vs 5% just changes how much of their money goes to paying down principle vs the interest. With that the price of the house will fluctuate to account for this reality.

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Re:Mortgage rates just hit 5%. Buying a home has become a lo... by tallclair on Friday April 08, 2022 @10:42AM (#30957465)

This doesn’t account for all the people who can afford to pay in cash. That will shift the equilibrium.

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Re:Mortgage rates just hit 5%. Buying a home has become a lo... by ivanche on Friday April 08, 2022 @10:55AM (#30957738)

I don’t have hard data on this; however, I believe that cash buyers are minority, maybe even significant minority. It would be awesome if someone could share concrete numbers on this.

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Re:Mortgage rates just hit 5%. Buying a home has become a lo... by beembeem on Friday April 08, 2022 @11:54AM (#30958804)

A local realtor in my hot market on the west coast indicated to me that it was as much as a third of sales they saw in the last year FWIW.

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Re:Mortgage rates just hit 5%. Buying a home has become a lo... by dariusj18 on Friday April 08, 2022 @12:19PM (#30959078)

That's partially because there is a whole new industry of preapproved loans that you can treat as cash when negotiating to buy a home.

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