Is it a Good Idea to Sell a Home With High Interest Rates?

Is it a Good Idea to Sell a Home With High Interest Rates?

Interest rates are on the rise, which may be more significant than you realize. Many assume this means it is not a good time to sell a house. After all, if people are unable to afford the same amount for a dollar, logically that would suggest having to sell at a lower price. However, it isn’t necessarily that clear.

Any investment involving thousands of dollars should be discussed with a professional familiar with the market’s trends and forecasts in your region. A great piece of advice for Los Angeles may be a worse case scenario in Houston, so having some local guidance is essential.

However, the following concepts and considerations are a good place to start before deciding whether to put your home on the market or wait.

Interest rates are on the rise

The Federal Reserve has been raising interest rates, which means a house that is listed at the same price as six months ago actually costs quite a bit more today. Why? Because the economy is growing, and they want to avoid more inflation, a recession, or another financial crisis.

The Fed wants to avoid a housing crisis like what happened in the early 2000s. When the Fed increased interest rates in 2004 and 2005 too quickly, it caused home prices to fall by more than 30% with the peak hitting in 2008 when the entire housing market collapsed.

Today, the Fed is trying to avoid that same mistake by raising rates cautiously. Since this started in the summer of 2022, the median price of homes has already dropped by $43,000. There are many factors to consider aside from a drop in price, including the kind of homes hitting the market, and the hesitancy of buyers. But the bottom line is if had you sold your house 10 months ago, you could have gotten more out of it.

There is always risk

There is always risk involved in selling your home, but there are some ways to mitigate it.

Your home could sell for less than you paid for it. This is called a “short sale” and means that the bank will only accept a certain amount of money as full payment on your mortgage. If the selling price of your home falls below this amount, they will still own part of it even though they aren’t getting any money from you.

Another risk is that the market will take a turn for the worst. People tend to think that once the market starts to dip a bit, it is time to hold onto a home until things start to go up again. What they don’t realize is that sometimes, the dip is the first of many steps of a downward trend that can continue for years. Selling a home for $300,000 today may not be the $325,000 it could have been last year, but what if it goes down to $250,000 in the next two years?

In a sense, the market would fail if it was dependable and easy to predict because everyone would sell at exactly the right time. Sometimes, you just have to take a risk and hope for the best.

You may not get as much for your home

The longer you wait to sell your home, the greater the risk. You could get caught in a drought of buyers or a flood of foreclosures that makes it harder for you to sell. This is especially true if you’re trying to sell a home when there are other homes on the market with similar prices but better condition and location.

If you do try to sell in this market and fail, then you will have given up some control over your future. You won’t be able to move as easily if housing prices rise again because the market will outprice your budget.

It may be wise to buy and sell now if it makes sense for you financially

Selling your home may be possible if you are able to buy another house that suits your needs. Even if the market says otherwise, it could still be a good idea in this situation, even if it means going a less traditional route.

As highlighted before, the market is unpredictable. Even the best analysts and forecasters are unable to completely predict the market, particularly with companies like Airbnb purchasing homes to use for their own gain as opposed to families looking for a place to live.


When it comes to real estate, there’s no way to know what the future holds. In general, if you’re looking to sell your home right now, high interest rates may not be the best thing for you.

Interest rates are rising and buyers have less money to spend on homes than they did before. There is a high likelihood that prices will continue to drop in some markets as homeowners try to sell their properties at a lower price point – or even worse, they might not be able to sell at all. But as mentioned, not every scenario is the same. If things make sense for you to sell, go for it and expect the unexpected.

Another option is to utilize the services of an instant selling home program like what’s offered here at Light Street Residential. We can give you an offer on your house quickly, which can help relieve a lot of anxiety. Don’t worry about if your house will sell — start thinking about where you’ll go next!

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