No matter what the interest rate is, Clagett Enterprises can help you with your real estate goals in MD.
It’s no secret that the global and national economies haven’t been in their best health for at least the past few years. Real estate is one of the markets that has dealt with significant challenges in this time; for example, people who bought houses when interest rates were 2-3% might be struggling to pay their mortgages now that things have changed. One might naturally think that zero interest rates would be ideal, but are high interest rates good in the end? Let’s take a look at this issue.
The Theory for High Interest Rates
In present-day economic theory, interest rates discourage people from spending and encourage people to save their money. When you increase interest rates for housing or any other kind of real estate, it slows down spending. Some people will not be able to afford the higher interest rate or not want to spend, which will, in theory, slow down the rate of inflation. High interest rates are put in place to put the brakes on demand-driven inflation. In theory, when fewer people buy housing because of the high cost, housing prices drop to become more competitive.
The Argument Against High Interest Rates
On the flip side, one could say that high interest rates hurt the economy and middle-to-lower-income people, especially. People cannot afford real estate or spend less elsewhere to afford it, leading to fewer sales for small businesses, potentially leading to employee layoffs, poorer people, and a deadened economy.
When Interest Rates Are Irrelevant
High interest rates could help or hurt the economy, but interest rates don’t solve everything. High interest rates do not mean that real estate prices will necessarily drop. In the last few years, people who bought real estate at inflated prices and low interest rates will have to take a loss if they want to sell competitively today, adjusting today’s realistic mortgages for inflation. The job market, natural disasters, and other factors can also cause inflation, and lower or higher interest rates won’t be able to help.
Navigating a High Interest Rate Economy
Everyone is going through the same struggles in one way or another economically. With the right knowledge and the best realtor, you can find real estate today that works for your budget and needs.
Trust the Professionals at Clagett Enterprises for Your Realty Needs
If you’re looking for an experienced property management company, the perfect realtor for your property, or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with commercial sales, leasing, management, and development and consulting, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook and Linkedin.