August 2022: How Interesting Are Interest Rates?

3 min readAug 15, 2022

Here’s the Story:

As buyers are exercising caution in the NYC real estate market, it’s easy to blame mortgage interest rates. But there’s more to it than that.

Down to the Nitty-gritty:

While interest rates have an impact on monthly affordability, buyers who feel confident in the long-term benefits of their investment will still move ahead. Uncertainty is the real culprit, the reason some properties are sitting on the shelves rather than flying off them. War, inflation, recession talk and stock market performance all make for uncertain times. Buyers and sellers alike are closely analyzing real-time data to decide what the current price levels are (not just where comps sold three months ago) and some sellers are starting to chase the market with price reductions.

What’s the Takeaway?

Real estate is not something to jump in and out of, and I always recommend looking ahead five to seven years when making a decision to invest. But if you think that rising interest rates have ruined your chances to enter the market, consider this: the 30-year fixed mortgage rates are similar to the levels we experienced back in 2018. So ask yourself what prompted you to move in the first place. Because whether to buy or sell now is not a question of the market, but of where you are in your life, and what you need to make it a good one.

The Gabriele Moment

In 2002 — when interest rates were above 7% — my husband and I bought a parlor floor co-op down the street from our rental. It was “for sale by owner” and everything that could go wrong did. The adventures didn’t stop after closing, and I remember showering with the garden hose until we could gather enough money to pay for a plumber. In the end, it was home sweet home, and we refinanced quickly so we could save enough money to make other real estate investments. Market values went up and we sold that parlor apartment in 2013, buying a townhouse that we’ve already refinanced twice. It’s all about how you play the game, so don’t let interest rates deter you from making a smart decision that’s best for you.

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