Another rise in interest rates causes concern for many homeowners who have their houses listed for sale.  But what if rising interest rates could actually work in favor of the home seller?

For those homeowners out there who are wondering, “how will rising interest rates affect the housing market?”, keep reading…

What Rising Interest Rates Means

With yet another decision by the Federal Reserve to raise interest rates in 2023, the housing market is sure to change.  How?  First, let’s talk about what happens when interest rates rise.

When interest rates go up, so does the estimated monthly mortgage payment for folks looking to purchase a house.  For the potential home buyers who are working on a tight monthly budget, homeownership may now be out of reach.

But that’s not all.  Some home buyers who aren’t in a hurry to purchase might postpone their home search until rates come back down.

Even though there is no guarantee whether or not interest rates will be lowered or how long it might be before that happens, buyers who have the luxury of time can choose to wait it out.

What are the disadvantages of rising interest rates for sellers?

As you can imagine, the idea of buyers dropping like flies isn’t exactly comforting for those homeowners who are trying to sell their property.

As soon as word gets out that interest rates are rising, this can cause a panic for home sellers who are desperate to sell.  They fear that having less buyers to work with will equal less action on their listings and ultimately less opportunity to sell.

Unfortunately, this pressure can push sellers to make decisions they normally wouldn’t, such as lowering the listing price of their home or involving a real estate agent if they didn’t already list with one.

Both of these moves will take a considerable amount of equity out of the homeowner’s pocket.  But worse than that, sudden and widespread price reductions can cause the value of homes to go down overall, slashing the value of nearby homes in the area that aren’t even on the market.

So how do we break this downward spiral before it happens?  Glad you asked…

Who benefits from rising interest rates?

Believe it or not, the first group of people who can immediately benefit from a spike in interest rates are the home sellers!

Surprised?  It may not seem like the case, especially after we just talked about how higher interest rates can negatively affect the market.  But here’s why this is the case…

As soon as the higher interest rates are announced, buyers who were previously taking their time browsing the market will be pressured to act in one of two ways.

Like we discussed earlier, buyers who aren’t in any rush could potentially drop out of the market and return later.

On the other hand, buyers who need to purchase a home sooner rather than later will be pressured to buy even more quickly, before interest rates rise again.  With this being the case, it is in the sellers’ best interest to wait and see whether or not some highly-motivated buyers come their way!

In fact, the added pressure of rising interest rates may be just enough motivation to cause buyers to make their best and highest offers to be sure they seal the deal.

How to Overcome Rising Interest Rates in Your Local Market

At the end of the day, it’s up to the home sellers to decide who wins when interest rates rise.

For the sellers that adjust their price out of fear, their desperation will invite buyers to come in with lower or less favorable offers.  Sure, you may sell more quickly, but that will come with a hefty cost.

Even if most sellers drop their prices, being the only seller to stand your ground will show a different image.  Maintaining your price creates a position of posture that will have buyers thinking twice before they dare to come in with less than a full-price offer.

In fact, after the rush of price drops and quick deals, you can be sure that there will be less inventory on the market which means less competition for your listing.  This is a prime example of how patience can seriously pay off.

But if you’re still worried about your house not selling, there are other strategies to consider as an alternative to lowering your price.

In our FREE Webinar: “How to Easily Sell Your House & Keep Your Equity”, we discuss the most relevant tips to help homeowners boost their listing under difficult market conditions.

YOUR House, YOUR Equity

We might not be able to tell you how high interest rates will go in 2023 or how long they will stay high.  But what we can do is provide you with the tools you need to sell your house quickly and easily, with or without a real estate agent.

To learn more, check out our main page at www.YourHouseYourEquity.com.