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Reacting to Rising Interest Rates
Information for Buyers
What happens to the real estate market when interest rates rise?
Higher interest rates can slow down home sales while lower interest rates tend to stimulate sales activity. Buyers like low interest rates because home loans cost less and they can afford to buy more. When interest rates increase, homes and loans are less affordable, shutting more people out of the real estate market. Other factors that affect the real estate market include job insecurity and low consumer confidence.
What happens if a property stays on the market for a long time?
The longer a property stays on the market, the more likely the seller is to receive low-ball offers, which are offers substantially below market value.
What if I cannot find a house in the short time I have during a relocation visit?
You may want to rent when you relocate. Renting in the new location gives you the opportunity to learn more about the area before you make a huge investment. It also can give you time to sell your home.
What is the best time to finance a fixer-upper?
The best time to buy a fixer-upper, if your intention is to turn the house around for immediate profit, is when home prices are climbing. Be careful that you don't get caught up in the buying frenzy that can occur in a hot market because you could end up overpaying for the house. This will cut into your profit margin. There is less risk if you are buying a fixer-upper to live in for several years while you fix it up.
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