Interest Rates and How They Affect the Market

Interest Rates and How They Affect the Market

What are mortgage interest rates?


Mortgage interest rates are what financing companies charge you for a loan to buy a home; along with the price of the home and the size of your down payment, they determine the amount of your monthly payment. Home loan interest rates fluctuate with the state of the market and have a considerable influence on how many houses are being bought and sold. When mortgage interest rates are high, buyers can’t afford to pay as much for a house as when rates are low. That means, when you’re trying to sell a house when rates are high, you’ll likely have fewer potential buyers and probably have to settle for a lower purchase price. 
But you can make interest rates an indicator, not a liability. When you can recognize changes in the market, you can time the sale of your house for when you have the best chances to sell it for a higher price.
What are the different types of home loan interest rates? How will rising interest rates affect the housing market? Learn how to identify interest rate changes and use them to your advantage.

How do different mortgage interest rates affect the sale of your house?

There are two basic types of mortgages that vary in popularity with the condition of the housing market. 
The first is a fixed mortgage with a home loan interest rate that doesn’t change over the life of the loan, typically 15 or 30 years. While your interest rate can’t be raised if rates go up, they can’t be lowered either. The rate stays the same over the entire length of the loan. 
The second type is an adjustable mortgage with rates that can be lower or higher depending on the market. Popular when fixed mortgage rates are high, they generally have a lower interest rate at the beginning of the loan and adjust to current rates in later years. If housing interest rates are higher when the mortgage adjusts, that means you’ll have a higher monthly payment. However, if interest rates are lower, your monthly payments will be, too. With an adjustable-rate mortgage (ARM), it may be advisable to sell your home when it appears your interest rate is going to increase. 
You could be leaving money on the table if you decide to sell your house when mortgage interest rates are high, demand is low, and buyers are making lower offers. In extreme cases, you may even be forced to sell your house for less than you paid for it.

Inflation can affect home loan interest rates

Low interest rates make the demand for houses rise and, in turn, house prices increase. It’s no surprise that’s the best time to sell. Finance companies keep a close eye on inflation and market conditions to set their lending rates and requirements for people. They may make it more difficult to borrow money so they can avoid the risk of giving out more than they should for mortgages and other types of loans.
You may hear news stories about the rates the Federal Reserve, or “Fed,” charges. The Fed sets the short-term interest rates they charge financial institutions, increasing or decreasing them in an effort to manage inflation. While mortgages are long-term loans and not directly affected by the Fed’s rates, mortgage rates tend to move in accordance with the Federal Reserve rate. The Fed generally raises rates when inflation is occurring. That’s a major influence on holding prices down; when credit is more expensive, spending decreases, and prices do, too. 
That includes spending on houses. Potential buyers either postpone their house search or try to negotiate a lower price to stay within the monthly payment range they can afford with the higher interest rate. This is the most difficult time to sell on the housing market.
There are other local changes in the Atlanta market that can decrease the demand for houses as well—such as a large company laying off workers, changes in school systems, and rising crime rates.

HomeVestors® can be your solution in uncertain times to sell your home fast for all cash.

For over 25 years, HomeVestors has delivered fair, fast cash offers that sellers can trust. As America’s #1 home buyer, we’ve given a fresh start to homeowners who need to sell their houses fast for cash. We’ve helped homeowners avoid increases in adjustable-rate mortgages, deal with job loss or other income reductions, and sell houses that are losing value due to market conditions. 
There are other cash buyers, but not all cash buyers operate the same way. Some might delay your closing when the market changes or when other obstacles arise. Others might charge surprise fees right up to the day of closing. We have the experience to handle unexpected situations and can close quickly, sometimes in as little as three weeks. We don’t charge commissions and pay typical closing costs, saving you thousands when you’re trying to make the most from selling your house.
Don’t miss the chance for a quick cash sale. Avoid the financial stress that homeownership can bring. We’ve bought over 140,000 houses from sellers in Atlanta and across the US during difficult times stemming from sporadic interest rates and other influences. 
Contact us and one of our Atlanta property specialists will come to see you and your house. There’s no cost, and you could get a cash offer on the spot with no obligation to accept it. You have nothing to lose but the stress over your house. 
Contact us today to learn how we make selling your house easy.