Why do Interest Rates Affect Pricing? - EP 169 - Homeownership

<p>In this week's episode, we discuss how interest rates affect the pricing of a home. In the United States, everything is about the monthly payment. When this monthly payment becomes unaffordable, the purchase price needs to be lower. So a slight uptick in rates can mean a significant downward trend in purchase power. The interest rate, as it goes up, increases the monthly payment. For example, a 1% rate increase on a $500,000 purchase increases the monthly payment by $288. This can disqualify a buyer, which can lead to house prices settling down.</p>