Should I Buy a Home When Interest Rates Are High?

Buying a home when interest rates are high can have both advantages and disadvantages. Here are some points to consider:

Advantages:

1. Greater inventory and negotiating power: During times of high interest rates, there may be fewer buyers in the market. This can work to your advantage as sellers may be more willing to negotiate on price and terms. There might also be less buyers in the market that you have to compete with, making your offer potentially being the only one a seller has to consider.
2. Potential to reap long-term benefits: If interest rates decrease in the future, you may be able to refinance your mortgage to a lower rate, reducing your monthly payment and saving money in the long run.
3. Locking in a lower monthly payment: Even though interest rates may be high, you can still secure a mortgage with a fixed interest rate. This means your monthly payment remains the same over the life of the loan, regardless of fluctuating interest rates.

Disadvantages:

1. Higher overall cost: High interest rates mean higher borrowing costs for your mortgage, which can result in a higher total cost of homeownership over the life of the loan.
2. Limited affordability and loan options: Higher interest rates can impact your borrowing power, as lenders may be more cautious and offer lower loan amounts. This can limit your options and affordability when searching for a home.
3. Potential slower appreciation: High interest rates can dampen demand in the housing market, leading to slower home price appreciation. This could affect the potential resale value of your home if you plan to sell in the near future.

Ultimately, the decision to buy a home when interest rates are high depends on your personal financial situation and long-term goals. It’s important to carefully assess the current market conditions, consult with a financial advisor, and evaluate your ability to afford the higher borrowing costs. 

When you are ready to talk about the housing market, get in touch and we can chat! I am a firm believer that it’s never too early to start making a plan, even if your plan is way in the future!

Danielle Deschenes

OR Broker | Tenant Placement Specialist

She/Her

I can't wait to help you navigate the Portland Real Estate Market. Whether you are a first time home buyer, a seasoned investor or somewhere in-between, you can count on me to help you through the process of buying or selling your home! As a 100% Pacific Northwesterner, I love all that this city has to offer (rain and all). Originally from Bothell, Washington I spent most of my life in Retail Management. I started my work career as most do as a courtesy clerk, little did I know I would stick with it well after college. I studied Psychology and Sociology at the University of Washington with an emphasis in Criminology. To this day, I still find myself watching shows that have to do with true and fictional crime. In 2013, my boyfriend and I moved to Salt Lake City, UT with 2 dogs and 2 cats. No easy feat for anyone. There I spent a year working for eBay as a Customer Solutions Agent. My hats off go to those of you that do that work, it is not easy! After 2 years in beautiful Utah, we decided that Portland was the place to be. After coming to visit to look for housing, we knew that we had made the right decision. We fell in love with all this city has to offer. I knew that the great PNW was where I belong, I was home! Over the years I have bought and sold property in Seattle, and we own our home here in SE Portland. I have always loved to look at homes on the internet and would stop by open houses when I drive by them. Hmmm, what better career blends a love for homes and a natural affinity for customer service into one? Here is where my Real Estate venture begins. I want to help you love Portland! What better way than to own your own home? I'm always available to take the very best care of you and anyone you refer to me. Please don't hesitate to contact me with any questions. Let's go grab a coffee or a beer and we can talk about your plans for home ownership in this beautiful city!

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• T: 503-388-1185
• danielle.pdxrealtor@gmail.com