Rate hike cuts both ways for the housing market

  • Historically, the psychological effect of rising rates seems to cut two ways.
  • One way is prompting buyers to move quickly before rates rise even more.
  • Alternatively, higher rates entice cautious buyers, who are already cutting it close with their personal finances, to hold off buying a house.

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Nobu Hata is actively in the market to buy a home, and he knows interest rates are going up, but it is still “a little bit of gut check when it happens.” The Chicago resident dubs it a “personal hurdle” for some homebuyers. (Although Hata works for the National Association of Realtors, this is not the official company line.)