What is the buying power of your target market?
The buying power of a potential homebuyer has changed over the last few years. What a buyer could afford and qualify for in 2006 has been dramatically reduced in 2010. Several of the rules of the game have changed. Interest rates have edged up, down payments have increased from 5% to 20%, and back end loan to value ratios have decreased. The illustration below demonstrates how this impacts the purchasing power of the targeted buyer.
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