Rising Interest Rates and Your Sales Conversations

If you’re in residential real estate sales, you’re dealing these days with people who are seriously concerned about rising interest rates and inflation. Home buyers somehow got very comfortable with sub-4% interest rates. Those rates were really low for a long time, long enough to where customers began to feel that super-low rates were normal. They weren’t. 

The reality is that interest rates are still low compared to the 50-year average of 7.8%. But this can easily be overlooked when buyers feel like they missed out on something better. 

There are two factors at play in the buyer’s mind when it comes to interest rates: cost and fear. 

The cost relates to the monthly payment, and high payments are a very real thing these days. On average, buyers are going to pay about 45% more each month for the same home than they would have just a year ago, based on the combination of higher prices and higher rates. That’s real money. 

The fear issues are related to the concept of higher rates. The mentality says, “Oh no, I could have paid way less if only…” This is absolutely true. That window is closed and buyers missed out. It can’t be denied. 

So why should someone purchase a home today, even with substantially higher rates? There are plenty of reasons why this makes sense but none more important than your customer finding the right home. The task of the sales professional is to keep the customer focused on what matters most.

With all the uncertainty your buyers are facing right now you have an opportunity to shine. You don’t want your buyers feeling like they’re all alone or misunderstood here. Your ability to demonstrate empathy in your sales conversations will create a preference to buy from you. Keep them focused on what matters most – living in the right home.