Interest rates are rising. What if you want a house?

So you’re saying this time is different?

Yes and no. Facts always change, even though economic, stock market and real estate cycles are regular (if not predictable or consistently scheduled) events throughout our lives.

And, oh, what a set of facts we have. A pandemic and government response has resulted in many people spending less on travel, commuting, clothing, student loan repayments and entertainment.

This put extra money in the deposit accounts of those who did not lose their jobs or income. At the same time, mortgage bundles that the Fed was buying helped push mortgage rates down to a record low.

This has helped house prices rise, just as many people have accelerated their moving plans in search of more space to work from home and keep the kids out. There was even more competition for available homes, and new homes were taking longer to build due to supply chain issues and labor shortages.

There is more. Professional investors were buying homes — with the cash offers most sellers prefer and most individual homeowners can’t match — like never before in 2021. According to Redfin, they accounted for 18.4% of home purchases in the fourth quarter of 2021. In cities in the South and West – such as Atlanta, Charlotte, Miami, Orlando, Las Vegas and Phoenix – investors accounted for more than a quarter of sales.

These institutional buyers are probably not done either.

“It’s an absolutely terrible time to be a buyer,” said Sarah Ponder, a financial planner in Austin, Texas. There, the median home price has risen 30% over the past year, according to the city’s Board of Realtors.

Ms Ponder, who specializes in helping real estate professionals and has already completed five real estate transactions in just 15 years of adulthood, pointed to one final X-factor: people her age may not know that interest rates are rising rapidly. home buying psyche.

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