Mortgage Rates: What can you afford? | Legacy Wealth Management

The purchasing power of today’s homebuyers has taken a big hit as mortgage rates sit at their highest point in more than 20 years.

The latest report from real estate broker Redfin shows that a homebuyer with a $3000 monthly budget can only afford a $429,000 home with a 30-year mortgage at 7.3%.

That buyer has lost $71,000 in purchasing power over the past year. In December of 2020, that same buyer could have afforded a $629,000 home.

Reference point: October 1981, the average weekly interest rate for a 30-year, fixed rate loan was 18.6%, according to Freddie Mac.

Material prepared by Sherman Portfolios, LLC.

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