Many Las Vegas home buyers will find themselves with higher interest rates when they start looking for homes in January in the Las Vegas area as rates have begun to creep up. Higher interest rates translate into a reduced purchase power of Las Vegas real estate. How so?
A home buyers purchasing power is dictated in part by their monthly payment, and as interest rates go up their purchasing power is inversely affected. This means that at 4% interest rate you could purchase a $100,000 Las Vegas home with a monthly payment of 477.42 and at 4.9% you can purchase a $90,000 home in Las vegas with a monthly payment of $477.65, the payment on both would be about the same, but you now get less house. Why is this even something you should know?
Many home buyers have been either waiting for interest rates to go down even more, or for the Las Vegas real estate they want to make a home have the price reduced even further, but with interest rates on the rise they now have to wait for the price to go down as they may not be able to buy that home they wanted.
All publications and media don’t expect interest rates in Las Vegas to go up in an unusual manner, but the increase that has taken place is enough to make Las Vegas buyers a bit nervous as their dream home has moved a bit further away. Those that are currently in escrow are hurrying to get things closed before their rate lock expires and they have to pay more interest, or even worse, if they bought at the limit of their credit, they may not be able to close all together and may have to begin the buying process all over and locate a different less expensive Las Vegas homes.
The calculations I made above are examples, but you also have to consider that additionally you will have to pay for insurance and taxes, and those will make your payment rise. If you need to talk with a knowledgeble lender or just have a question dont hesitate to contact me.
