How do rising interest rates affect the buying and selling of homes?
How do rising interest rates affect the buying and selling of homes?
The impact of rising interest rates on the buying and selling of homes is substantial. For buyers, increased rates mean higher mortgage payments, reducing affordability and purchasing power, potentially leading them to opt for less expensive homes. Conversely, sellers may face competition as buyers are financially constrained—this could lead to price adjustments in listings. Additionally, real estate investors may seek to capitalize on cash flow properties to mitigate risks associated with higher borrowing costs. Both buyers and sellers need to adapt their strategies, whether it's acting quickly based on changing rates or evaluating current market conditions to price homes effectively.