The real estate market is always influenced by various factors, one of which is interest rates. During Covid-19, we hit some record lows, and after the world started to level out a bit, we jumped into some record highs for interest rates. Recently, things have started to shift again, and that’s what what we’re going to cover now.
For buyers, lower interest rates mean lower mortgage payments. This makes it easier for buyers to afford a home, and it also makes it possible for them to buy more expensive homes than they would have been able to with higher interest rates. In addition, lower interest rates mean that buyers can take out larger loans, allowing them to purchase more home for their money. As a result, more people are able to enter the real estate market, which can lead to increased demand and higher prices.
For sellers, lower interest rates can also be beneficial. With more buyers entering the market and having the ability to afford more expensive homes, sellers may be able to get higher prices for their properties. Additionally, lower interest rates can also make it easier for sellers to find buyers, as more people are in a position to buy homes. This can lead to faster sales and potentially higher profits for sellers.
However, lower interest rates can also have a downside. For example, if the interest rates are low for too long, inflation can occur, which can erode the purchasing power of the buyer’s money. In addition, if interest rates eventually rise, it can make it more difficult for buyers to afford their mortgage payments, potentially leading to a decrease in demand for homes and lower prices.
Right now, rates are climbing down from the spike that happened after Covid. If you missed your chance then, or just didn’t have the means then, now is the time to act.