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PRICE vs INTEREST RATE correlation

🤯🏠💸 #property PRICE vs INTEREST RATE correlation. #buyersagent #investing 👇
* Wealth Effect: Rising #house prices increase household #wealth, which encourages consumers to spend more.
* Borrowing Power: Higher property #equity allows homeowners to refinance or borrow additional funds to finance spending.
* Activity & Turnover: Increased property turnover boosts spending on related services (like #realestateagent and movers) and goods (like furniture and appliances).
* Investment & Construction: Price upturns spur renovations and boost buyer deposits, making it easier for developers to secure project financing.
* Downturns: Falling property prices trigger the reverse of these economic benefits.

* How Interest Rates Drive Property Prices:
* Discounting Future Value: Property, like any asset, is valued on future income or benefits. Higher interest rates increase the discount rate applied to future cash flows, reducing the property’s present value today.
* Financing Constraints: Higher rates lower the maximum amount buyers can borrow and raise ongoing loan servicing costs, tightening constraints on purchasing power.

PRICE vs INTEREST RATE correlation