How Mortgage Rates Affect Home Values-Interactive Tool

I created The Rate Mirror™, an interactive tool that shows how changing rates affect a buyer’s purchasing power and a sellers price.

[ Open The Rate Mirror™ ]

Buyers don’t shop by price. They shop by payment.

When rates go up, the payment goes up. The buyer’s budget doesn’t. Something has to give, and it’s usually the price. But there are other strategies that change the outcome.

Your home didn’t change. The math did.

A buyer who could afford $600,000 at 6% can afford about $523,000 at 7.5%. Same buyer. Same income. Same payment. That’s $77,000 of purchasing power gone, and every seller in Franklin, Nashville and Middle Tennessee is pricing against it whether they know it or not.

As a rough rule, every one-point rise in rates costs a buyer about 8 to 10 percent of their purchasing power.

Price and rate move together

Rising prices and rising rates stack. A 5% higher price plus a 1.5-point higher rate adds more than 20% to the monthly payment. That’s how a house that sold easily two years ago now sits. The house isn’t the problem. The payment is.

Buydowns work, but they aren’t free

A seller can pay to lower the buyer’s rate. A temporary buydown lowers the payment for a year or two. A permanent buydown lowers it for the life of the loan. Often a buydown gets the buyer back to their payment for less than a straight price cut.

But buydowns cost real money. They have limits set by the loan program and the lender. And the deeper you buy, the more each step costs.

The solutions

Lower the price. Buy down the rate. Or combine the two. When none of those fit, there are other ways to sell in a hard market. The right answer depends on your house, your buyer pool and your timeline.

Why I built it

I created The Rate Mirror™ because I kept having the same conversations. Sellers and buyers alike hear about rates in the headlines but rarely know the real impact on their own transactions.

I built it so sellers can recognize what today’s buyer can actually pay, and so buyers can see every option for getting back to their budget, not just a lower price.

Run your own numbers

The Rate Mirror™ is a mortgage rate impact calculator for sellers and buyers in Middle Tennessee. Enter your price and the rate buyers were shopping at when you priced it. See what the same buyer can afford today, and compare a price reduction against a rate buydown side by side. Rates update every business day.

[ Open The Rate Mirror™ ]

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