The California State Association of Realtors (CAR) recently had a class on financing which I attended. They had a fabulous graphic presentation which really highlighted the difference in purchasing power between a mortgage interest rate at 3 percent and at 7 percent. For the illustration they used a conventional loan for a buyer making $150,000 annually, with 20 percent down where the buyer wants/needs to keep the payment at 30 percent of their monthly income or $3750. At 3 percent they can afford a $829,127 house. At 7 percent they can afford a house up to $579,381. Quite a difference! This is what is impacting our buyers right now and why many are stepping to the sidelines until prices line up with their expectations.
October State-wide Stats
