How Will Higher Interest Rates Affect The Real Estate Market?

/ Serve Realty/

Well 2022 is here and while 2021 saw record low rates, 2022 will see those rates start to go up. How will those rise in rates affect 2022?

So we have known for months now that a rate hike has been long overdue and the Federal Reserve made it very known that rate hikes were in the future. Well 2022 is the future, so now what?

My straight forward response is it will slow things down, but the market will continue to be strong. Maybe not record setting numbers but still strong. Why? The economy overall continues to be strong in the US and especially here in the North Texas area. With that comes very strong buyer demand, and the inventory shortage continues. So with those two items at hand I see the market being able to absorb the hikes to come out strong.

But please know, prices will not rise as quickly, less buyer demand and maybe inventory that is on the market longer than before. Please know these past few years have been beyond strong, and that trend just can not continue. However just know just because the market slows just a bit doesn't mean it is slow by any means, it just means it may still be strong but not record breaking. We will still be VERY far from a normal market.

With the heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate. I strongly feel an informed and educated consumer will be more confident & make better decisions. Have questions about this or other topics, do not hesitate to contact me.

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Luis Cuevas, Broker/Realtor®

Serve Realty

(214) 783-0535

Luis@ServeRealtyTx.com

Check out my website for more helpful tips: http://ServeRealtyTx.com

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How Rising Interest Rates Affect You | Luis Cuevas Realtor® | RE/MAX Cross Country

/ Luis Cuevas Realto® | RE/MAX Cross Country/

Rising interest rates are becoming a reality but how do the rise in interest rates affect you if you are buying a home?  The reality is the economy is strong, unemployment is low and consumer confidence in their jobs is high, which equals a strong buyer demand for housing and mortgages.  Add the fact interest rates have been at historical lows for several years now and you can only expect to see rates begin to rise.

So what does that actually mean to you when you are thinking about purchasing a home?  Lets start with the basics, what are interest rates?  Interest rates are essentially the cost to borrow money.  The higher the rate the more expensive it is to borrow money.  When things are more expensive, in this case money to buy a home, then you can afford less.

Higher interest rates equal higher cost to borrow funds which ends up affecting the amount you can borrow.  For those consumers who may be maxed out at borrowing a certain amount, in this example lets say $300,000.  If the rates go up the amount the person could borrow would go down, lets say $290,000.

The higher interest rates caused the expense of borrowing to be lower which means a higher payment, however in order to stay under a certain payment the amount borrowed had to be adjusted downward.  This lower amount borrowed equals a lower sales price a consumer can qualify for.

Expect interest rates to continue to rise as the economy continues to be strong.  I just don’t see rates going down at all.  So if you have been thinking about buying a home just realize now may be the time to buy while rates continue to be low.

With the heart of a teacher I strive to educate my clients so they can be better informed.  I strongly believe an informed consumer makes better decisions and are less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

Don’t forget to “LIKE” this video and be sure to Subscribe to my YouTube Channel as well.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome