Much has been said about the rising prices of real estate in the Bay Area. But this is only half of the story.

Here's the other half:Home Purchase Power - How Much House at $2,500 a month

This chart is quite a bit different from your typical 'interest rate' graph.

The key idea behind this chart, is to keep you monthly payment the same, regardless of what happens with to the interest rate. 

Example 1: a monthly payment of $2,500 at a 6.5% interest rate, buys a loan of $396,000.
Example 2: a monthly payment of $2,500 at a 3.2% interest rate, buys a loan of $578,000.
Example 3: a monthly payment of $2,500 at a 3.95% interest rate, buys a loan of $525,000.
Example 4: a monthly payment of $2,500 at a 4.95% interest rate, buys a loan of $470,000.

Never under estimate the power of leveraged money! A change in interest rate of 1 point, changes your corresponding qualification amount by 10%!!

Let's look at the numbers another way:Effect of Home Appreciation AND rising interest rates on your monthly mortgage payment

The basic premise behind this scenario is that real estate prices are expected to rise about 4.7% and interest rates rising also to 4.6% by the end of the year. What this chart illustrates, is that the exact same purchase now versus the end of the year, will end up costing you $30,550 more, which equates to $405 MORE per month! The very same house!

What does all of this mean?

Buy your new home before it gets even more expensive!

Everyone's situation is unique. Therefore, I'll be happy to sit down with you and explain how this works for your particular circumstance. Call me at (510) 681-3499 or just click here to send a message to me. It's important to wrap your head around these concepts. Are these trends foolproof? Nope. But they are realistic. The fear, is that interest rates will rise even higher that these projections.


Disclaimer: This chart and the numbers used are rough estimates but are based on current values and realistic projections by economists. It is VITAL that you contact a lender to get personally pre-approved. Everyone has a different credit profile and your actual interest rate and payments will differ. I'll be happy to recommend one to you. Contact me