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How Rates Affect Both Buyers And Sellers

Interest rates affect both buyers and sellers, and here’s why.

Today we’ll talk about increasing interest rates and how they affect both buyers and sellers. Everyone looks at interest rates and talks about how much they will affect the buyer, but in reality, rates affect both buyers and sellers. In the last 30 days, we’ve seen rates jump up almost half a point. How does that impact our market?

For every half a point that the rate goes up, buyers lose 5% of their buying power. From a seller’s perspective, this means that your pool of potential buyers shrinks. As rates rise, fewer buyers can afford the property you are selling. Buyers searching in higher price ranges might be forced to look at your house too, but they might not be interested.

“Interest rates affect both parties in a transaction.”

As a buyer, the home price you can afford goes down as rates rise. Let’s say you were approved to buy a house for a certain amount. If rates rise, the lender may say that you’re no longer qualified for that amount.

We have to keep an eye on these interest rates all year because they affect both parties in a transaction. If you have any questions about this topic or any other real estate subject, you’re more than welcome to call or email us. You can also check out our video on similar topics on our website.

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