Higher Mortgage Interest Rates Might Be Resulting In More Buyer Competition In Moderate Price Ranges

Clearly, the Harrisonburg and Rockingham housing market is still quite competitive right now, especially for homes under $400K.

One reason for this might be related to current mortgage interest rates!

Higher mortgage interest rates result in higher monthly costs.

If some home buyers were looking in the $400K - $500K range when mortgage interest rates were around 3%, they may very well now be looking in the $300K - $400K range now that mortgage interest rates are above 6%.

After all, if you're financing 80%...

$450K purchase at 3.25% mortgage interest rate = $2,011 per month

$350K purchase at 6.25% mortgage interest rate = $2,070 per month

Yikes!

So, if $300K - $400K purchasers were previously only competing with eachother, they might now find themselves competing with buyers who were previously planning to spend up to $500K!

That said, it is of course also true that some $300K - $400K purchasers might also have had to reduce the target price for their home purchase as well.