Interest Rate Hike - Are you still buying?

Columbus, Ohio
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Interest Rate Hike - Are you still buying?

Harrison Chow
Real Estate Agent · Columbus, OH · Member since 2019 · 292 posts · 364 votes

How high do you think the interest rate would go? I am seeing 6.5% for commercial loans right now. What are you seeing? Are you still buying in this environment? 

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Andrew PostellPro Member
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
4y

@Harrison Chow 100% still buying.  I love it when things get challenging.  It makes my competition go away.  Still buying and will still be buying.

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  • Account Closed
    Member since 2021 · 217 posts · 190 votes
    4y
    This is BP. If the interest rates were 50% and the end of the world were next week, BP'rs would still say they are buying.
    4Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    4y

    @Harrison Chow STILL BUYING :)

    1Reply
  • Masha Rizzi
    Investor · houston, TX · Member since 2021 · 44 posts · 17 votes
    4y

    I just closed on a property with a 5.5% rate which was such a hard thing to do after a low 2% I got in the same area, almost same property, exactly a year before. 

    That being said, I don't plan to let me business/investments slow down because of a rate increase. Instead I just adjust my calculations and continue to make sure the numbers work. 

    If the numbers work out, I'd rather get the property with the higher interest rate to start cash-flowing today and refi in the future when rates drop than pass up the deal in an attempt to wait for lower rates (which will be who knows when and would make me miss out on a lot of deals in the meantime) 

    1Reply
  • Jared HottleBusiness Member
    Real Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
    4y

    Inventory still remains extremely low so hopefully interest rates going up will slow demand. Either way if its a good deal I think buy. Rates may be higher but the chances of them going down at some point in the intermediate term (3-7 years) is high and refinance then. 

    [email protected]319-288-5382
    Jared Hottle Real Estate59 Reviews
    WebsiteView Page
    1Reply
  • Victoria Young
    Member since 2022 · 6 posts · 3 votes
    4y

    Locked with better.com at 5.625% with 1.625 pts. They still make you download all tax returns and such even though they are touted as being "all digital." Quicken did it all for me when I did a refi last yr. Anyway, any tips on where to stash cash-out equity til I find my next rental? I've never taken out a loan only to pay interest on it thats more than I can make in any bank account. This makes me uneasy as I feel like the Maryland market is a good year away from normal pricing for rentals. Asking prices are ridiculous in my area-even for hovels.

    1Reply
  • Joaquin Camarasa
    Real Estate Agent · Springfield VA · Member since 2018 · 480 posts · 400 votes
    4y

    I can feel demand is starting to cool off a little from what it was like 3 months ago. 

    I am still planning to purchase two more properties this year. It comes down to your personal situation.

    1Reply
  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    4y

    I have seen 18% interest before.  So while I don't like rising interest rates when I am borrowing, they are not enough to scare me at the moment.  To be honest the strong increase in housing prices has been the hardest thing to overcome.  I expect interest rates to climb to about 8% before the feds back off unless inflation drops off.  I have normally calculated my purchases with also running them at a 2% increase in interest rates.  I use 5 year ARMs and 15 or 20 year loans, so I have to be ready for a possible 2% increase.  My past loans had a lock of not letting them increase by more than 2%.  I noticed recently however that my last few loans have the rate increase capped at % not 2 %, so I am recalculating.  While I want to keep buying it has been getting extremely difficult to buy even break even deals.  I have had to modify what I am willing to take in risks.  I buy properties with more problems than I used to, and I am taking slimmer margins, and I am doing some houses into STRs.

    1Reply
  • Harrison Chow
    OP
    Real Estate Agent · Columbus, OH · Member since 2019 · 292 posts · 364 votes
    4y

    @Oliver De Ausen 6.1% is still pretty good! Are you investing in FL only? have you thought about OH? it's a great market to invest in! :) 

    0Reply
  • Harrison Chow
    OP
    Real Estate Agent · Columbus, OH · Member since 2019 · 292 posts · 364 votes
    4y
    Quote from @Account Closed:
    This is BP. If the interest rates were 50% and the end of the world were next week, BP'rs would still say they are buying.

     LOL so true! 

    0Reply
  • Dave Skow
    Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    4y

    @Harrison Chow- present conventional rates in resedential marketplace are in the 5-6% range  .....I wont  be  suprised to see the rate continue up another  1% fee and settle in the 6-7% range for home loans ....and  fyi - there are  still many buyers  buying  in the PNW 

    1Reply
  • Ryan Planchon
    Investor · Miami, FL · Member since 2019 · 41 posts · 33 votes
    4y

    I am still buying.  Looking to connect with people in the Columbus Area to build my Network.

    3Reply
  • Ashley Cross
    Lender · Columbus, OH · Member since 2020 · 202 posts · 214 votes
    4y

    I'm seeing high 7s and low 8s for rates but I'm still buying. If the numbers make sense I'm buying. Columbus is red hot.

    3Reply
  • Austin McClainBusiness Member
    Real Estate Agent · OH · Member since 2021 · 348 posts · 602 votes
    4y

    I like this graph in the link below that shows the average US mortgage rate since the 1970s. We are still in a really low-rate environment. I think it just feels bad since we're coming off historic lows and got used to crazy low rates. 

    https://fred.stlouisfed.org/se...

    [email protected]614-710-4827
    2Reply
  • Joe Miller
    Real Estate Broker · Columbus, OH · Member since 2021 · 203 posts · 247 votes
    4y

    Always be reasons not to buy. Analyze accordingly and you wont be blindsided! 

    1Reply
  • Karissa Sampson
    CO · Member since 2020 · 63 posts · 40 votes
    4y

    Under contract right now on a SFH that will be converted to multifamily. My market suddenly had a dozen sub-500k houses (mostly small 1400 sqft or less SFHs, but some have been nicely renovated) show up in the past two weeks and we haven't had a decent looking sub-500k house on the market for the past 2 years (except for some hellholes) Houses staying on the market for a week or more, some selling for asking, one sold for less than asking, prices getting lowered--- non of which has happened for the past couple years. TBH it makes me nervous considering I'm about to buy a $471k house to BRRRR thru a conversion but I keep looking at my spreadsheets and the math. It works and that's what I keep telling myself as I fall asleep at night, haha

    1Reply
  • Oliver De Ausen
    Rental Property Investor · Hawaii & Maryland · Member since 2019 · 31 posts · 24 votes
    4y
    Quote from @Harrison Chow:

    @Oliver De Ausen 6.1% is still pretty good! Are you investing in FL only? have you thought about OH? it's a great market to invest in! :) 

     Funny because all my investments are in OH, So I'm venturing off into new territory with this FL build.  I personally don't want to put all my eggs in 1 basket (market)...

    1Reply
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    4y
     Under contract to buy 2 duplexes.
    2Reply
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    4y

    My rents go up faster than interest rates.

    1Reply
  • Harrison Chow
    OP
    Real Estate Agent · Columbus, OH · Member since 2019 · 292 posts · 364 votes
    4y
    Quote from @Account Closed:
    Quote from @Joaquin Camarasa:

    I can feel demand is starting to cool off a little from what it was like 3 months ago. 

    I am still planning to purchase two more properties this year. It comes down to your personal situation.

    What kind of thinking did you decide to keep investing in real estate?

    Positive Cashflow. If there is a good cash flow even if the interest rate is at 20%. It would still work. 

    0Reply
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