The Rise in Interest Rates and How It Affects Buyers and Sellers
When the COVID-19 pandemic began in early 2020, the Federal Reserve was quick to act by substantially reducing interest rates, which resulted in many new buyers entering the market to purchase a home at low rates. Because of the high appeal of owning a home, buyer demand far outstripped the supply of homes, which caused home values to skyrocket by the end of 2021.
Since March 2022, the Federal Reserve has increased interest rates five times in an attempt to balance the market more effectively. These changes have affected the entire market and have caused buyer demand to slow over time. On December 14, the Fed hiked rates another 0.75 percentage points. This affected buyers and sellers.
