Interest rate hikes worry buyers and sellers | Jax Daily Record | Jacksonville Daily Record

Talk of rising mortgage interest rates is worrying both buyers and sellers.

Neither group is showing signs of panic, but they want to close their deals as soon as possible.

Buyers budgeted their highest bid based on interest rates. When this rate increases, the monthly mortgage payment also increases.

If interest rates rise to exorbitant levels, potential buyers withdraw their offers.

Diana Galavis

In most cases, rising interest rates cause buyers to postpone initial home improvements, such as paint or new carpeting, said Diana Galavis, who sells for Watson Realty Corp. Southside and is the president-elect of the Northeast Florida Association of Realtors.

In the worst case, the potential buyer is taken off the market.

“Potential buyers are staying in rentals longer than they anticipated. Landlords are raising rents. If they spend more money on rent, that’s less money they have to save for a house,” she said.

Buyers and sellers are getting creative, said Mark Rosener, NEFAR 2022 chairman and regional vice president of Watson Realty Corp. for the North Central Florida region.

“I hear sellers want to close but make a post-occupancy deal so they can find a home they want to buy. Buyers are willing to do that so they can close with the lower rate locked in,” said Rosener.

In other cases, buyers and sellers arrange to have necessary repairs made after the sale to secure a low rate.

Marc Rosener

“People just prefer to shut down and deal with repairs at a later date,” Galavis said.

“I had a buyer who was told it would take at least six months to fix a window.”

A rise in rates also hurts sellers.

A seller may need to reduce the asking price if there are time considerations or if they have to start the selling process over.

One of the reasons there’s no panic is that nearly a third of all Northeast Florida home sales are cash transactions, said Missi Howell of The Legends of Real Estate and President of NEFAR 2021.

“With cash, the interest rate has nothing to do with it. Cash is still king,” she said.

However, one area of ​​concern is new construction transactions, she said.

The double whammy of inflation and material shortages raises the cost of a new home, before interest rates rise.

For a 30-year fixed rate mortgage, lists starting rates of 3.62% to 4.25% with annual percentage rates of 3.76% to 4.25%.

This is more than the average rate of 3.19% at the end of 2021 reported by

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