Are Low Rates Good for Everyone?

Lower interest rates, while seemingly advantageous for all home buyers, can create challenges for entry-level home buyers. Lower rates increase the purchasing power of all buyers, which often leads to higher demand and consequently higher home prices. Seasoned investors and existing homeowners take advantage of these rates to purchase additional properties, the competition intensifies, driving prices further up. This makes it harder for first-time buyers, who typically have less capital and lower credit scores, to secure affordable homes. The rapid price increases can outpace the ability of first-time buyers to save for down payments, making entry into the housing market more difficult despite the lower borrowing costs.