If mortgage rates fall, will housing become more affordable? I think for most people in the mortgage business, the answer is probably “yes.” Housing affordability is a big topic these days, and the Dallas Fed put out an interesting study claiming that falling interest rates don’t necessarily lead to better housing affordability. The idea is that when mortgage rates fall, house prices generally rise. As any car salesman will tell you, people focus on the monthly payment, not the sticker price. Lower rates means a lower monthly payment, and people will bid up the price of properties, which offsets the benefit of lower mortgage rates.
Weekly Tearsheet: Addressing housing affordability.
Weekly Tearsheet: Addressing housing…
Weekly Tearsheet: Addressing housing affordability.
If mortgage rates fall, will housing become more affordable? I think for most people in the mortgage business, the answer is probably “yes.” Housing affordability is a big topic these days, and the Dallas Fed put out an interesting study claiming that falling interest rates don’t necessarily lead to better housing affordability. The idea is that when mortgage rates fall, house prices generally rise. As any car salesman will tell you, people focus on the monthly payment, not the sticker price. Lower rates means a lower monthly payment, and people will bid up the price of properties, which offsets the benefit of lower mortgage rates.