Interest Rate Hike Spells Trouble for Home Sellers

Home sellers may face significant challenges in the coming months as rising interest rates shrink the pool of qualified buyers, according to real estate experts. The Federal Reserve's latest decision to raise the target range for the federal funds rate from 3.5%-3.75% to 3.75%-4% is expected to make borrowing more expensive.

DaGrosa Capital Partners founder and chairman Joe DaGrosa told Fox News Digital that sellers have 'very high expectations' but may need to be prepared for a 'little bit of a hit' if they want to sell their homes. The average rate on a 30-year fixed refinance increased to 7.14% from 6.87% a week earlier, while the average 15-year fixed refinance rate was 6.30%.

Brett Rubin, Vice President at Compass, noted that 'fewer buyers equals fewer opportunities to sell the home, less competitive environment.' He added that this could lead to homes sitting on the market for longer and more price reductions, which would be 'tough on both sides of the spectrum.'