In Hawaii, we are known to have some of the highest real estate prices in the country. So far this year, we've seen a steady increase in interest rates. To keep things simple, here's an illustration that shows how an increase in rates over time could lead to less purchasing power for a Buyer.
Although it's tough to find a home or condo here these days for $350,000 or less, the point this illustrates is an increase in interest rates from 4% to 5% reduces a Buyer's purchase power by over 11%!
If this trend continues, it'll make housing less affordable for those that are financing. If you're on the fence and will be financing, I'd recommend speaking with a lender to see where you stand as it may make a difference between affording to buy now vs. missing the market.
The illustration above was provided by courtesy of William Doom with Loan Depot. To find out today's current rates, feel free to check with him for more information.