How will the interest rate increase effect both buyers and sellers?

Everyone is wondering, “How will interest rate increases effect both buyers and sellers?”

We’ve pulled together some statements from industry experts to help keep you informed!

For Buyers:
Business Insider provides a general rule of thumb – every percentage point increase in interest rates corresponds to a 10% decrease in purchasing power. In other words, a buyer who could afford $2,000 monthly payments on a $414,000 home with a 3% mortgage, could only afford a $320,000 house with a 6% mortgage.

Jacob Channel, LendingTree’s senior economist states, “Though it’s unlikely that home prices will majorly slump, an increase in housing supply will likely significantly slow home price growth and give would-be buyers more housing options to choose from.”

For Sellers:
Mark Zandi, the chief economist at Moody’s Analytics, says, “I don’t expect a collapse in house prices,” he says. He is not predicting a housing crash anything like what we saw 15 years ago, because of two fundamental forces supporting home prices.

The fundamental forces supporting current home prices are:
1. Supply – there is a shortage of homes available
2. We no longer have reckless mortgage lending – people can afford their loans.

Have any specific questions – email us at and we’ll do our best to answer them!