Can The Bergen County Real Estate Market Sustain Its Recovery If Interest Rates Were To Rise?

Low Interest Rates In Bergen County

Does the increase in demand  in  towns such as Tenafly means that the housing market is back?

One of the main factors fueling the demand to purchase are the incredibly low interest rates.  In fact   current mortgage rates are about 49% lower than they were when housing prices peaked in the summer of 2006.

A buyer in Bergen County financing $417,000 today at 3.62% for 30 years  will pay a monthly sum of  $1900. The same amount financed  in 2006 at 6.63% for 30 year would have cost  $2671 per month.  Take this difference of $771 per month, and over the life of the loan  today’s buyer is paying $277,560 less than what it would have cost had he financed in 2006.

When factoring these lower interest rates people are paying far less for housing than they did at the peak of the real estate market.  If the extraordinarily low levels of current interest rates were to increase , it is highly likely that the housing market would still be getting worse.