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by 6gvONxR4sf7o
1890 days ago
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Everything you’re talking about only relates to the list price. I don’t know the right name for it. The value of the property. What you’d see on the for sale sign. You’re right about different levers on that. The problem is that that’s not the price that matters in this particular setting. What matters are the monthly payments. If you change rates, the list price will change but monthly payments won’t. |
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Exactly
If the buyer can only afford $1,000 a month with a 30 yr mortgage - that sets the upper bound of the list price of the asset
If rates rise the monthly payment stays the same, but the buyer can only afford a lower priced house.
If rates go down those $1,000 can now pay for a higher list price