What Rising Rates Mean for Buyers and Sellers
How will home prices and values be affected as rates continue to rise?
“How will the rising interest rates affect the housing market?” I’ve received this question many times from my clients. They’re concerned about how this will impact home prices and values. Today I’ll respond to this question and explain what the recent interest rate hike means for buyers and sellers.
Housing prices have leveled, and inventory has increased in the last three to four months. I can’t guarantee that the market has already cooled down, and it’s difficult to conclude how rising interest rates are affecting the market since the rates are still historically low.
However, if interest rates continue to rise, home affordability is reduced. Ultimately, this will put pressure on prices, causing them to drop. Currently, home values are not decreasing, but prices are changing. Sellers no longer have the power that they did a few months back. I can’t say for certain that this is due to rising interest rates alone, but it definitely has to do with consumers’ sentiment.
"As interest rates continue to rise, people can’t afford as much home."
As a buyer or seller, it will help you a lot if you do your own research about interest rates to understand what’s best for your situation. Decide your next move based on what you need now, and don’t wait for interest rates to go up or down. If you need more help with buying or selling plans, don’t hesitate to call or email me. I’ll be happy to help!