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How can you talk to buyers about higher interest rates? During the peak of the pandemic market, most buyers qualified for mortgages in the 2% or 3% range. Now, the average mortgage rate in our market is about 6.875%, which seems high to buyers used to those lower rates. How can you convince your clients that there are still opportunities in our housing market?
One point you can mention is that currently, there are few buyers in the market. Many have decided to sit out of the housing market until rates fall back down. This means that a flood of competition will hit the market as soon as rates decrease. On the other hand, buyers in our current market don’t face such steep competition, and they may be able to secure great concessions from sellers. Then, they can always refinance once rates come down later.
If your client responds better to numbers and data, let them know how much of a difference interest rates really make. For example, the difference in monthly payment between a 6.875% and 4.875% rate on a $300,000 mortgage is just under $18,000 after three years. That may sound like a lot of money, but given the state of our current market, it is possible to get that much from a seller in concessions and repairs, which would offset the extra cost.
You don’t have to watch your business stagnate due to higher rates. If you have questions about this topic or anything else, please call or email me. I am always willing to help!
