Mortgage rates have climbed above 7%, reaching a nearly two-year high and raising new questions about how buyers and sellers will respond across the North Texas housing market.
While the increase could make purchasing a home more expensive for some buyers, local real estate experts say higher rates could also reduce competition and create opportunities for people who remain in the market.
Brent Myers, director for the Greater Fort Worth Association of Realtors, said the increase was anticipated.
“I think a lot of people anticipated it. It makes a big difference in how real estate is handled,” Myers said.
Myers pointed to inflation as one of the factors behind higher rates.
“So I mean it’s inflation and I realize that’s part of what the overall issue is, is that everything is expensive and so the idea to bump those rates up to bring down inflation,” Myers said.
Despite the higher cost of borrowing, Myers said the changing market could work in favor of some buyers by reducing the number of people competing for homes.
“I know that sounds a little counterintuitive, but the fact that the rates are up a little bit, there’s going to be less competition for houses,” Myers said.
“We’re going to see some people drop out of that market and so there’s going to be some good opportunities there.”
But interest rates are only one part of the affordability equation.
Justin Landon, president and CEO of the Metro Texas Association of Realtors, said buyers also need to consider other expenses that come with owning a home.
“I think it’s important to understand that there’s a lot of factors that play into that. It’s not just the interest rates,” Landon said.
Those factors include property taxes and homeowners insurance, which Landon said can have an even greater effect on affordability.
“A much bigger headwind for affordability than interest rates. The rapid increase in valuations in our property taxes over the last couple of years has been huge,” Landon said.
“And the cost of homeowners insurance is absolutely skyrocketed. And those are actually having a much greater impact on affordability than interest rates are.”
Myers and Landon said the American dream of homeownership has become less clear as buyers navigate higher costs. Still, they said owning a home remains attainable with strategy and planning.
This story was originally reported for broadcast by NBC DFW. AI tools helped convert the story into a digital article, and an NBC DFW journalist edited it again before publication.