How Increased Interest Rates Affect Buyers

By Mark Callender

Hello, my name is Mark Callender and I am a licensed real estate agent with RE/MAX Results. Because I have been helping families buy and sell their homes for more than 18 years, I am now helping their children to buy their first homes and their parents to downsize. No matter the direction you’re moving, my goal is to make the process as calm and enjoyable as it can be.

I received a lot of questions about the rise in interest rates and the market shift that’s happening as a result. This will mostly affect buyers, but it is starting to impact sellers, too. With interest rates climbing, many buyers are focusing on that increase. However, 5.5% is still a great rate historically speaking. If you’re thinking about buying a home, I want to bring up a few things you might not have thought of.

For one, these increased interest rates mean that you have less competition. You may not see as many multiple-offer situations. I’ve had a few buyers who’ve gotten their offers accepted recently because of this reduced competition.

Along with multiple offers comes higher prices. In the past few months, I’ve seen offers of $10,000 to $30,000 over the list price. That’s starting to cool down, so you are paying more in interest, but you’re not paying as much on the purchase price. If interest rates drop in a couple of years, you could refinance and get a great deal.

There aren’t as many waived inspections; sellers are starting to accept offers with an inspection contingency. The market used to be so competitive that buyers couldn’t get their offer accepted if they didn’t waive the contingency. It’s still competitive, but not as much as it was.

There are a lot of details that I wish I could get into, so if you have any questions, call, email, or text me. I would love to talk about our market more with you.