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The rate is irrelevant. Matching the ratw doesn't matter. Matching the approproate monthly payment is all that matters.
by arcbyte 3y ago
The rate is irrelevant. Matching the ratw doesn't matter. Matching the approproate monthly payment is all that matters.
- agloe_dreams 3y ago> Matching the approproate monthly payment is all that matters. I'm not sure you follow. Monthly payment, assuming the same loan term and the buyer not losing equity, is (amount borrowed + interest) / term. If the person selling their house was paying a lower rate and their house gained in value, and the house they are buying is worth the same (as the housing market got broadly more expensive) but the interest rate is higher, it means that to match the monthly payment one would have to buy a 'cheaper' house than their current. That just isn't favorable.
- xrikcus 3y agoYes, which means downsizing. Need to downsize will put people off selling. People being put off selling reduces supply. Small supply keeps prices high.