Interest rates play a major role in real estate — influencing everything from monthly mortgage payments to home prices and buyer behavior.
When interest rates are low:
- Borrowing becomes more affordable
- More buyers enter the market
- Home prices typically rise due to increased demand
When interest rates are high:
- Monthly payments increase for buyers
- Demand cools, reducing competition
- Home values may level out or decline slightly
Even a 1% increase in mortgage rates can significantly affect a buyer’s purchasing power. That’s why many real estate professionals track interest rates closely and help clients time their decisions accordingly.
