Will the Raising of Interest Rates Slow Down House Price Inflation or Is Demand Too Strong? | Joseph “Joe” McInerney | Chicago

House prices are a measure of how valuable property is. If house prices go up too quickly, it means that the property’s value is going up too quickly. It’s not suitable for individuals to own property worth more than they can afford to pay for it. This is why house prices tend to go up slowly — if you buy something that you can afford to buy, it will be worth more after you have paid for it.

The Evolution of House Prices

House prices are a measure of how valuable property is. If house prices go up too quickly, it means that the property’s value is going up too quickly. It’s not good for an individual to own property worth more than they can afford to pay for it. This is why house prices tend to go up slowly — if you buy something that you can afford to buy, it will be worth more after you have paid for it.

The Power of Interest Rates

Interest rates are the amount of money you have to pay every month to borrow money. If you’re paying too much interest, it’s a sign that house prices are going up too quickly. This is because very few people can afford to buy a property while paying back their loans. This means that the house price inflation is slowing down. If interest rates remain relatively low, house prices will continue to rise at a slow pace and vice versa.

Is it a Good Time to Purchase a Home?

If you’re looking to buy a property, it is crucial that you consider the time of year and whether it is an excellent time to purchase. If you are considering purchasing at the peak of the market, then it is important that you do this at least 2–3 years before your target date. This will ensure that you can afford your debt repayments and that your property value doesn’t increase too much from when you bought it.

It’s best to be prepared for any expenses to be paid back over time. You may well be able to find a still available property but at a large chasing price. This is what most people are doing, and it’s causing the inflation that we see, and house price is not going to slow down any time soon.

Originally published at https://josephmcinerneychicago.net on May 4, 2022.