In a housing market with rising interest rates, buyers become discouraged because their purchasing power declines. This is true if home prices remain steady. As interest rates rise, demand slows down. When demand for housing slows down, home prices decline.
Higher interest rates do not always translate into a higher monthly payment. Higher interest rates and lower home prices can result in a similar monthly payment as lower interest rates and higher home prices.
Don’t start house hunting without speaking with a Realtor and a mortgage lender. The information they can provide will save you time and money.