10/02/2026
Three ways higher mortgage rates can hurt the real estate market
1. Reduced buying power. Higher monthly payments mean buyers can afford less—or may postpone purchasing altogether.
2. Slower sales and pressure on pricing. Weaker demand can lead to longer marketing times, price reductions, and more seller concessions.
3. Fewer homeowners willing to sell. Owners with low mortgage rates may stay put rather than take on a more expensive loan, limiting available inventory.
Three potential advantages for investors
1. Less competition and more negotiating room. When buyers pull back, investors may have opportunities to negotiate price, repairs, or closing costs.
2. An advantage for cash buyers. Investors who can purchase without financing avoid the higher borrowing costs affecting other buyers.
3. More time to evaluate a deal. A slower market can give investors more room to review inspections, operating expenses, and property condition before committing to a purchase.
But higher rates can create serious trouble for existing investors.
Many commercial mortgages—including loans on larger multifamily and mixed-use properties—have shorter terms, often five, seven, or ten years, even though monthly payments are calculated over 20–30 years. At maturity, the remaining balance becomes due. Owners generally must refinance, negotiate an extension, sell, or pay off the balance.
We are going to talk more about this in an upcoming post and explain a little bit more why this could have negative impacts on the housing market as a whole, not just for investors, but their residents too. 🏘️ Stay tuned!
Please keep in mind these are just a few examples and the list goes on!
