What are the Short and Long Term Effects of Rising Interest Rates in the Tampa Bay Real Estate Market?

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Andrew Duncan, Tampa Bay's #1 Realtor and Expert, discusses the short and long term effects of rising interest rates on the Tampa Bay Real Estate Market. He has Arnie and David Diaz from Waterstone Mortgage and to Shawn Yesner of Yesner Law as guests on The Duncan Duo Real Estate Show.

Arnie says that with home prices and rates moving up, the affordability is going to be waning so people who have been on the fence about making a move will get into the market now. He says that there will be a max influx of traffic through the real estate offices of the mortgage lenders because the refinancing side will be going away. So, the short term effect will be positive because it will motivate a lot of people to take action now but in the long term, as the rates creep up, it will cause some challenges.

David says that getting pre-approved can affect consumers. If you got pre-approved 4 months ago, you need to check again because they base it on a monthly payment which might be slightly higher now so it's better to touch base with your lender. If interest rates go up even a quarter or half point, it's a significant increase in your payment that could cause you going the other side as Andrew points out.

Sean mentions that interest rates used to be based on economic outlook but now, they seem to be more politically tied. David agrees and that interest rates are tied to a lot of things. What they're watching right now is what's happening in Europe since it has a big impact on the rates.

Another prediction Arnie says is that in the next year or two, the ARMs will be coming back. In previous years, a lot of consumers opted for Fixed rates but due to the rising interest rates, people will lean more towards getting an ARM which as Arnie describes is if you get an ARM for 10 years, your interest rate will be fixed for the same amount of time which will allow you to do something with the property within that timeframe.

To get more Tampa Bay Real Estate news and advice from Tampa Bay's #1 Realtor, tune in to The Duncan Duo Real Estate Show on 970 WFLA - Tampa Bay every Sundays at 10 am.