Is a recession coming? Can you afford it?

[Tyler Warne]

As interest rates rise there will be decreased purchasing power. This automatically decreases the amount of house, duplex or whatever we can by (if a loan is required) based on the debt to income ratios that a bank often uses. So how much does it affect us? See graphs below! 

The chart below is of the same thought, just the payment stays the same. Since we are a 'how much is the monthly payment' type of society, the chart shows that this drastically affects the amount of house that we can afford. Approximately a $2400 payment. 

While this does not have a direct impact on the psychology of a buyer, it removes a purchaser from the market, or a price range, which will lower demand and (economic magic) will lower housing prices. 

Why is this not the end of the world? Well when you bought, money was cheap, and your payment is still likely lower or similar to what you can purchase now and going forward.