How Do Interest Rates Affect Home Prices and Monthly Payments? (Home Buying Basics)

I'll explain the basics when it comes to interest rates affecting home prices and your monthly payment. Generally home prices tend to go up when interest rates go down. And when interest rates go up, home prices tend to go down. It feels like you can afford more home when interest rates are low (because you'll have the same payment), but you still have to be mindful of the overall cost of the home and the interest over the life of the mortgage.