Interest Rates Vs. Affordability

During this period of lowing interest rates, Home values ballooned. Now Rates are going up sharply! What do you think comes next?
Both Supply restriction and interest rate changes have lead to affordability changes very quickly.
If you can afford a $4000 per month payment, look at how interest rates dimish your purchasing power.
For a $2500 per month payment, this is what happens.
Rising rates is an extra Tax on home owners!
Extra tax at lower purchasing price!
And the results of the Affordability crisis are Price Cuts and lower Demand
My belief is that the pause in inventory growth is due to both the shock of the change and seasonal waiting. If conditions continue, there cood be a lot more inventory growth with price adjustments down.


  1. Asset Values have ballooned due to fed lowing of interest rates consistently over time. Question? Do you really think prices are sustainable at these high levels. It might be reasonable to predict that either prices need to come down, or interest rates need to come back down. I doubt they can both stay this high.
  2. Homes are simply not affordable at these interes rate levels.
  3. If you need to sell in the short term, There is a temporary pause in inventory growth that may be an opportunity to exit with proper pricing.
  4. Waiting for price growth is likely to take quite some time. Even though inventory is still historically low, the market is problematic.
  5. Planning to take advantage of market conditions if probably a good idea. This crisis may cause a once in a life time opportunity. You can either profit, or not depending on your action and timing.

So what do you need to do now? What opportunities do you need take advantage of? Do you need more cash? Do you need future income? Do you need better interest rates? Or do you just need a better place to live?

I have strategies to deal with all of these situations. Call me for free consultation. John – 949-481-7358

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