How Do Rising Interest Rates Affect My Ability To Buy A New Home?

You may be aware that home loan interest rates are increasing and that this change will affect you as a home buyer in today’s unique real estate market. Allow me to explain how this will affect you as a homebuyer and give you some thoughts on how to act on these most recent changes.

As home loan interest rates rise, the loan amount that you qualify for will be reduced. The higher cost of money { i.e interest rate} leaves several options to offset the higher loan cost which will result in a higher monthly payment. A home buyer can seek a lower priced home, the seller can reduce the sales price or the buyer can make a higher monthly payment. The end effect is that many buyers will not be able to qualify for a higher monthly payment.

Higher interest rates will have other impacts on the housing market as well. With each interest rate increase, more buyers are priced out of the market because they cannot qualify based on their income at higher interest rates. Additionally homes will not sell as fast because there will be less competition. Less competition forces many sellers, if they have the equity in the home, to reduce their price to compel a sale. Rising interest rates will also affect the value of the new home after the sale is closed because it will not appreciate in value as quickly at higher interest rates because there are fewer buyers creating the demand that increases value. Interest rates have been kept artificially low to allow the real estate market to stabilize while values adjust.

We should not be too concerned about rising interest rates. Artificially low interest rates cost the American taxpayer a lot of money and we will all benefit when the real estate market is normalized and the cost of money and real estate is linked more closely to real costs. In the meantime, home loan rates are low as well as home values and if you are serious about buying a home, it is still possible to get a very low interest rate but these opportunities will not last.

To find out how the current market affects you as a home buyer and how to structure an offer for maximum benefit or how the interest rates will affect you, call me Jillian Batchelor or my team at 702-823-3801 or We are standing by, ready and willing to assist you.


Jillian Batchelor, and The Batchelor Group, consistently rank in the top 250 Realtors in the Las Vegas Valley. With 11+ years in the Real Estate industry, with thousands of pleased home owners and home sellers over the years. Jillian is one of the strongest working Real Estate professionals out there.