Increasing Mortgage Interest Rates and Real Estate: Is Now The Time To Buy Or Sell?

Interest rates are the highest they’ve been in twenty years, and rumor has it they will increase again by the end of the year. While increasing interest rates should positively impact the economy, what does it mean for real estate? Is now a good time to buy or sell? It depends – let’s look at what you should do with your real estate when interest rates are high.

Should I Sell My Property?

When it comes time to sell your home, looking at the current real estate market is smart. Right now, the market isn’t as good as it was the last couple of years for sellers, but it isn’t terrible either. The increase in mortgage rates has taken many buyers out of the market or has reduced their purchasing power, and home values are starting to come down. Considering that some areas saw values explode over 20% in the last year, you’ll probably still make money if you sell your home today.

If you decide to sell your home in today’s market, you will need to price your home competitively and make sure your home stands out from the rest of the listings in your area. I have tons of tips and tricks to help your home sell quickly and for as much money as possible. I’d be happy to share those with you.

What If I Need To Buy A Home?

Buying property is always a good idea. Regardless of the mortgage rates, you will still gain equity over time which you’ll be able to cash in when the time is right. However, if you need to take out a mortgage to purchase a home, you’ll need to factor in the increase in mortgage rates into your monthly budget. The purchase price you could afford at this time last year is now less since the higher mortgage rates will eat up a lot of your monthly budget. But if you have the cash available to make a down payment and can afford the monthly payment, go for it! There’s less competition than there was a year ago, which will make the home-buying process easier. Plus, chances are mortgage rates will come down again in the future. When that happens, you can refinance to take advantage of the savings you’ll receive from a lower mortgage rate.

How Do Rising Rates Impact Investors?

These mortgage rates are good news for you if you’re a real estate investor, especially if you plan to pay cash. As mortgage rates rise and housing becomes more expensive, demand decreases and causes values to come down. This makes it the perfect time to add some properties to your portfolio.

Today’s market is unique, and there isn’t a ton of inventory available in either resale or rental markets. If you purchase a property intending to rent it out long term, you should be able to find a tenant quickly and for a high monthly rate. Holding the property long-term is an excellent way to battle inflation and should lead to some nice returns when you decide to sell.

Don’t Be Scared

We know the news is full of doom and gloom, and things may seem uncertain, but the real estate market always moves up and down. If you have questions about your specific situation, I’m here to answer them and help you decide if now is the right time to make a move.

Irma Yapor is the Broker-Owner of Real Property International in Windermere, FL. With over 42 years in Central Florida and extensive experience in advertising, marketing and real estate, you have a well-rounded and knowledgeable professional on your side. Call 321-405-2799 for a no-obligation consultation.