The impact of interest rates on the housing market is particularly important for first-time homebuyers.
These individuals are often more sensitive to changes in interest rates, as they are likely to have smaller down payments and higher debt-to-income ratios than more experienced buyers.
As such, fluctuations in interest rates can have a significant impact on their ability to afford a home.
When interest rates are low, it is generally easier for first-time homebuyers to enter the market.
This is because lower interest rates mean that monthly mortgage payments will be lower, making homeownership more affordable.
As a result, when interest rates are low, we tend to see an increase in demand for housing, which can drive up prices.
On the other hand, when interest rates are high, it can be more difficult for first-time homebuyers to enter the market.
Higher interest rates mean that monthly mortgage payments will be higher, which can make homeownership less affordable.