You’ve probably heard that now’s the time for buyers to get into the market. The main reason for this is interest rates – that is, historically low interest rates.

If you’re considering buying a home in the next year, you may want to bump up that timeline. Right now, interest rates are low enough that you could afford more home than ever before. We’re talking about how interest rates affect your buying power and why you can afford to buy more home for less by taking advantage of today’s rates.

How Interest Rates Affect Buyer’s Purchasing Power

It’s important to understand how interest rates affect how much home you can afford. After all, the interest rate you can secure will impact not just monthly house payments, but also your overall purchasing power.

What is your purchasing power? It refers to how far your dollar goes. Purchasing power is the amount of house you can afford based on your available budget. There are all sorts of factors that go into this, like your down payment amount, debt, and credit score.

But interest rates play a huge role in what kind of home you can buy. Take a look at the chart below, which shows how different rates affect monthly payments for two different houses.

 The chart above doesn’t factor in any down payment amount on the home and focuses on Principal and Interest (P&I) monthly payments. If you’re interested to see how your monthly payment may change with these interest rates, you can calculate that here.

Paying Less for More Home

You can see how the buyer’s purchasing power changes based on what interest rate they can secure. We’re specifically looking at homes in the $400,000 and the $450,000 range.

A buyer who secures a rate of 3.75% for their new home could have the same monthly payment ($2,087) on a $450,000 home as someone with a rate of 4.75% would spend on a $400,000 home. The lower the interest rate you can get, the more home you can afford.

Today’s buyers can afford more home for the same monthly payments. You can extend these numbers to larger, more expensive homes depending on your budget.

Comparing Today’s Rates to The Past

Today’s interest rates are historically low. Even just a few years ago, rates were double if not triple what they are now. Back in 2006, the average mortgage interest rate was 6.4%. While that’s not terribly higher than today’s higher rates, even a few percentage points can make a huge difference in monthly payments.

Before that, in 2000, interest rates were averaging at 8%. Your monthly payments for a $400,000 home back then would have been $2,935 — nearly double the highest amount on the chart above.

While doubled interest rates may not seem crazy to you, consider what homebuyers faced back in the ’80s. In 1981, buyers faced interest rates at 16% or higher (source).

Can you even imagine? Compare that to today’s rates, even on the high end of 4.75%, and you can see why so many people are urging homebuyers to jump into the market right now.

Home Buyers Today Can Afford More Home for Less

The interest rate you secure plays a considerable role in determining how much home you can afford. Today’s rates are crazy low compared to those just a few years ago, not to mention those back in the ’80s and ’90s.

If you’re looking to buy a home, now’s the time to do it. You can take advantage of these historically low interest rates. You can even go beyond your expected price range because you can realistically secure a rate low enough to pay the same monthly payments on a bigger, more expensive home.

The market is hot right now for a good reason. Lower interest rates help home buyers – whether first-time buyers or seasoned buyers looking for their next home – get more bang for their buck.

Relocating can be tough for you and your family. Even if you’re only moving a few miles away, it’s hard to deal with so much change. Not only are you facing different commutes to work, school, and grocery stores, you’re also contending with joining a new community.

Getting to know your neighbors and neighborhood can be a challenge. That’s why we’ve gathered a few easy ideas that can help make the process easier. Even if you’re not a social butterfly, don’t worry. These are easy ways to help integrate yourself into a new community and learn about a neighborhood.

Take Regular Walks Around Your Neighborhood

Assuming you haven’t moved in the dead of winter, take some time in the mornings or evenings to walk around your neighborhood. If you can’t manage this every day, at least try to get out and about on the weekends.

You are likely to discover new bakeries, restaurants, or shops within walking distance from your new house. As you’re walking around the neighborhood, you will probably also run into your neighbors.

Besides, moving is so stressful for you and your entire family. Taking some time, even just five minutes, to walk around and get out of the house is an excellent de-stressor. Recharge your batteries every day, so you don’t wear yourselves out.

Take Notes On Your Neighbors (Without Being Creepy)

Not everyone feels comfortable approaching strangers. But even if you’re on the shy side, you can still get to know the people who live in your area. While taking walks through your neighborhood, pay attention to the kinds of activities your neighbors are into.

For example, maybe you see a neighbor wrangling kids carrying soccer gear. Or maybe you see the same neighbor working daily in a gorgeous garden. You can strike up a conversation later about community sports or ask for recommendations about local greenhouses. Finding common ground with the people living near you can be an excellent ice breaker.

You can learn about your neighbors this way without feeling like a stalker, which will make it easier to get to know them. You can also take a stronger approach and invite your neighbors over to your new home. Which leads us to…

Throw a Neighborhood Housewarming Party

No doubt your friends and family would love to join you in your new home for a housewarming party. But if you’re looking to get to know your neighbors, consider hosting a neighborhood get together after moving in.

First, give your family time to settle in, unpack boxes, and paint the walls. Then, within the first month of moving in, send out invitations (by mail or in person) to your neighbors inviting them over. It’s a great way to get to know your neighbors in a relaxed environment.

There’ a good chance you haven’t met all your neighbors yet. After all, moving can be so time-consuming! So, hosting a get-to-know-you party is a great way to meet everyone.

Sign Up For Next Door

Have you ever heard of Next Door? It’s a private social network for neighborhood communities. People living in your area can post about neighborhood news or alerts, sell or give away items, and generally interact with each other.

What’s great about Next Door is it offers you the opportunity to interact with people right away after moving into your new home. Since each neighborhood community is only open to those living within the area, it helps keep interactions local.

Sign up for your neighborhood’s Next Door community and introduce yourself! Start up conversations with people in your area, find common interests, and even learn about ways to get involved. People are always posting about intermural sports teams, community events, and other meetups.

Joining a new community can be a lot of fun. You have the opportunity to meet new people with similar interests and get involved in new activities. Pay attention to community events and attend them with your whole family. You’ll have a good time, and it will make the entire relocating process that much easier.