Interest Rate

Discussion in 'Buying & Selling Real Estate' started by kgord, Sep 18, 2015.

  1. kgord

    kgord Senior Investor

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    The fed is holding interest rates steady as for now, however, if the rates increase in the coming months, as anticipated, how will this affect the housing market. I had determined I wanted to place my house on the market this Spring...if the feds raise rates how will that affect potential home buyers..? I really want to sell!! but not at a major loss.
     
  2. Rainman

    Rainman Senior Investor

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    The impact of a Fed rate hike may not have much of an impact on the housing market but though prices of houses would go up slightly that wouldn't stop people from buying houses. However they would be less inclined to buy an expensive house. So if you aren't selling an expensive house, odds you'll get a buyer and you'll sell your house at a slightly higher price than you would have.
     
  3. crimsonghost747

    crimsonghost747 Senior Investor

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    The rise will most likely be a very minor one, so I doubt it will have much effect. But of course higher interest rates always make it harder for people to take out big loans, so that is what you need to consider.
     
  4. baudwalk

    baudwalk Senior Investor

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    CNBC survey sez: rate increase ~3% October, ~57% December, and the remainder in 2016. Given the no-go was proffered on global economics (http://www.bullmarketboard.com/threads/6052-Fed-No-rate-chsnge-in-September-2015) with unemployment and inflation a smokescreen, I don't see how the Fed can reasonably expect a miraculous improvement of global economic conditions in one quarter to justify a raise this year. Now, if their collective machinations change...
     
    Last edited: Sep 19, 2015
  5. JR Ewing

    JR Ewing Super Moderator Staff Member

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    When the banks can start charging a bit more interest for their loans, they will be more likely to lend more of it out more readily.

    I wouldn't worry about a quarter point increase at the Fed either way.
     
  6. kgord

    kgord Senior Investor

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    That is good to know. I have been told different things by different individuals. My house is moderate in price, so I think that I should be able to get a buyer, but I can not afford to give it away, so I am looking for a certain dollar amount. This is a secondary market, since it is a recreational area but my hope is that it will sell for a reasonable amount. I think it can, but houses are slow to sell down here, most people tend to have the houses on the market for months. I was concerned about the potential rise in the interest rates.
     
  7. Corzhens

    Corzhens Senior Investor

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    I'm not good in speculating on prices particularly that of real estate but I agree with you that an increased interest rate will have an effect in the real estate industry. Our house mortgage has a term of 15 years (fortunately we are already on our last year) and on the 3rd year, there started the so called repricing. That is the changing of the interest rate, i.e. it can be raised or reduced depending on the prevailing market rates. Fortunately the repricing did us some good because the initial interest rate was pegged at 11% and now it is down to just 8%.
     
  8. My401K

    My401K Well-Known Member

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    In real estate the consideration you should have should be about what price comparable properties are going for in your area. If interest rates go up it will not effect the comp values right away. This is why timing in real estate matters. It can be argued it might effect who can get a loan, at what rate the buyer might have to pay- but overall your property value is determined more by historical prices for "like" property then interest rate. Keep in mind there are people that will buy a home for cash, in those instances the interest rate does not matter to you as a seller at all. If anything it could help you because if someone wants to tax shelter they might sink funds into buying property.
     
  9. crimsonghost747

    crimsonghost747 Senior Investor

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    The thing is, if you want to sell the house then why not put it on the market right now? Why wait for spring?
     

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