Impact of Increasing Mortgage Rates and Closing Costs on Home Prices in Montgomery County MD 


Buying a home is a significant accomplishment in your family's life that can be financially rewarding and very satisfying. 

You may have an understanding of what a down payment and other costs are but, but there are additional costs branded as "CLOSING COSTS" that you need to consider

If you are thinking of buying a home in Montgomery County MD you need to know all of the costs associated with buying and owning your next home. This includes the costs of your downpayment as it relates to the purchase price and the type of loan you may be obtaining to purchase your house. 

The closing costs are also a huge consideration when saving enough money to buy a house in Montgomery County MD. They are also related to the total price of the house you are purchasing 


Today, I would like to speak more in detail about to this question I received


There are some who are calling for a decrease in home prices should mortgage interest rates begin to rise rapidly. Intuitively, this makes sense as the cost of a home is determined by the price of the home, plus the cost of financing that home. If mortgage interest rates increase, fewer people will be able to buy, and logic says prices will fall if demand decreases.

However, history shows us that this has not been the case the last four times mortgage interest rates dramatically increased.


Here is a graph showing what actually happened:

Last week, in an article titled “Higher Rates Don’t Mean Lower House Prices After All,” the Wall Street Journal revealed that a recent study by John Burns Real Estate Consulting Inc. found that:

“[P]rices weren’t especially sensitive to rising rates, particularly in the presence of other positive economic factors, such as strong job growth, rising wages and improving consumer confidence.”

Last week’s jobs report was strong and the Conference Board just reported that the Consumer Confidence Index was back to pre-recession levels.


Bottom Line

We will have to wait and see what happens as we move forward, but a decrease in home prices should rates go up is anything but guaranteed.


If you want to find the best house for the money in Montgomery County MD

This is what we can do for you, 

We will prepare you a list of houses that fit your criteria and take the time to show all these houses to you, with no pressure and no hassle

Please call us at 301-246-0001

Or text to 240-426-5754