The Link Between Interest Rates and Inventory

If you are in the market for a home, you have likely been paying attention to mortgage interest rate trends. However, you may have only thought about interest rates in terms of how much your mortgage payment will be. In addition to determining your monthly payment, interest rates will likely determine how many properties are listed for sale.

Current Homeowners Are More Likely to Stay Where They Are

A homeowner who is paying 3 percent on a home loan is not going to want to pay 5 percent on a new home loan. Doing so could add hundreds or thousands of dollars to the cost of a mortgage payment each month or year. Instead, it may be better to put that money toward upgrading the current house. Taking that step can make a house function better and allow a homeowner to remain there for several more years.

Higher Rates May Mean Fewer People Qualify for Loans

Before a person can sell his or her current home, it may be necessary to secure funding for a new home purchase. Generally speaking, anyone living in a starter home will be looking to move into a larger or more expensive house. This may mean a higher monthly mortgage payment, and an applicant may not qualify for a loan at a higher monthly payment. Ultimately, the homeowner will likely choose to stay in their current home. (Read about what happens if you missed a mortgage payment.)

Correlation Between Mortgage Rates and House Prices

Professionals Understand the True Impact of Home Market Rates in Las Vegas

If you are in the market for a home, it is critical that you pay attention to current mortgage rates. This is because interest rates play a role in determining how easy it is to buy a home or if it makes sense to sell a home. In some cases, you can negotiate a rate that is better than what a mortgage company in Las Vegas is advertising online or on television.