How Rising Interest Rates Affect Home Buyers?

Interest Rates have been expected to rise for some time and the Fed has announced that they will rise slowly throughout 2016. Even though, we are still in a low-interest rate environment and will likely continue in it for some time.

 

Overall, rising interest rates will continue to have little effect on buyers. The main effect will be in the amount of down payment home buyers will have to bring to the table. While gradual interest rate rises are unlikely to affect home buyers in substantial ways, knowing that banks continue to have strict and sometimes unforgiving underwriting procedures in place is even more important and can have a bigger impact on what home buyers can actually buy.

 

It is also essential for home sellers to be aware of the current interest rate environment because it will help them to price their home correctly. In addition home sellers benefit from knowledge about the interest rate environment by better understanding the buyer pool.

 

©SFRE 2017

 

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