How Interest Rates Affect Your Bottom Line

Whether you’re a buyer or a seller, interest rates can be the deciding factor in when you want to make your move in our market.

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What do interest rates have to do with your bottom line? Quite a few things, actually.

Interest rates started to go up right after the election—they jumped almost 1%. There was a lot of fear and trepidation in the market because everyone thought the rise meant the market was going to crash. Interestingly, though, we saw real estate sales go up over 11% in the month of January.

How did that happen?

As interest rates rise, buyers tend to get anxious. The buyers sitting on the fence thinking they can wait it out realize that as interest rates rise, home affordability drops, and if they don’t get in and buy now, they may be priced out of the market.

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The pressure is on to make your move now before rates rise any further.

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There are also expectations that the Fed could raise interest rates three more times this year. Again, as interest rates go up, affordability goes down. In addition to buyers being anxious they’ll be priced out of the market, any seller who wants to sell a home and trade up might look at the payment for their next house and realize they can’t afford it. 

That’s why there’s a lot of pressure for people to make moves now and lock in interest rates as low as they are now before they rise any further.

If you have any questions about how interest rates affect your bottom line, your payment, and your ability to move, please don’t hesitate to give me a call. Make it a great day!