Why Higher Mortgage Rates May Be Great For The Housing Market

As stocks sell off in part due to higher interest rates, the question now turns to how higher mortgage rates will affect the housing market? You might automatically think higher mortgage rates are negative for the housing market. But let's look at the other side.

One of the reasons why I like investing in real estate is because it tends to hold its value better. Real estate can be considered a riskier form of a capital preservation investment.

A small earnings miss in a high-valuation company tends to crush the company's share price. Whereas real estate values tend to just chug along, neither explosive on the upside nor downside, in normal times. It's the classic tortoise versus the hare story.

Just think about what happened with stocks in the month of January 2022. Do you think the national median home price was also down similar levels? Not at all. Seasonally adjusted, the national median home price was probably at the same level or higher than where prices started the year.

As a reminder, my 2022 housing market thesis was that the rate of appreciation will slow from ~16%-19% in 2021 to +8% in 2022. One of the reasons why is due to higher mortgage rates. However, an 8-10% appreciation rate is still great, especially if other asset classes end the year flat to down.

Take a look at this collection of 2023 housing market predictions. They're all over the place! But, the bias is toward the downside. With an 75% conviction level, I expect the median housing price for 2023 to decline by 8% to $419,000. 

Why Higher Mortgage Rates Could Be Good For The Housing Market

Despite higher mortgage rates acting as a headwind for housing prices, let's look at some of the positives.

1) Eliminates the marginal buyer and protects the long-term health of the housing market.

One of the reasons why the global financial crisis occurred in 2008-2009 is because borrowers stretched too far to buy a home. With low or no down payments, suboptimal credit, and unreliable income, homebuyers couldn't hold on in a correction. Lenders were also overly aggressive no doubt.

Higher mortgage rates help take out the froth in the housing market. Higher rates force lenders to scrutinize a mortgage application more closely. Lenders also try to forecast the future. They know that when rates go up, there is incrementally more risk for higher defaults.

Higher mortgage rates also knock out the marginal buyer who violates responsible home buying rules, such as my 30/30/3 rule and net worth buying rule. Fewer marginal buyers help protect other buyers and existing homeowners from experiencing a cascade of short sales and bankruptcies.

For the long-term health of the housing market, higher mortgage rates should improve the incremental quality of the buyer pool. We all know there are plenty of people out there who are stretching to buy property today. This may not be a great move in cities that face a lot of upcoming supply.

2) Gives cashed-up buyers an even better chance to compete.

During a housing market frenzy, you will often have to compete with multiple other buyers. Even if you've got strong financials and offer great terms, you might still lose out to a buyer with a higher offer, but who has poor financials. The seller often can't tell the full financial health of a potential buyer unless the buyer provides documentation.

It's kind of like how university admissions officers can't tell an applicant's full academic strength now that SAT and ACT scores are optional. As a result, applications to more selective universities have skyrocketed. But if you've got a high SAT or ACT score, it would be to your advantage to submit your test scores, even if it is optional.

If you are a cashed-up buyer (high SAT/ACT test score), you increase your chances of buying a property due to less marginal competition. Further, you might not have to pay as big of a premium to beat out your competition. This is obviously better for qualified buyers in the long term.

Historical 30-year and 15-year fixed rate mortgages chart

3) Less stress for sellers.

Selling a house is way more stressful than buying a house. If your deal falls through, it's egg on your face. You will have to re-list and go through the entire marketing and evaluation process again. Some buyers will wonder why escrow fell through, which may adversely affect your asking price. The waiting period for the buyer to perform can be excruciating since anything can and will happen.

When it comes time to sell your house, you might be tempted by a sky-high offer price, even if the buyer doesn't have strong financials. As a result, you might accept the highest offer price and end up regretting your decision if the buyer can't get financing in time or at all.

In a frothy market, you may have to wade through a dozen offers. But as mortgage rates rise, there will be fewer, but higher quality competing offers. As a result, you should be more confident about your choices.

With higher mortgage rates, you have a better opportunity to buy a move-up home at a better price.

4) Higher mortgage rates may boost prices further short-term

Due to the potential for even higher mortgage rates in the future, more buyers might rush to buy property, further pushing up prices short term. This is like Fear Of Missing Out at work, which is often counterproductive.

Remember, you can never change your purchase price, but you can often refinance and change your mortgage rate. Therefore, I encourage you not to rush into buying a home due to the anticipation of even higher mortgage rates in the future. There will always be another great house that comes to market.

The reality is, a 2% average increase in the 30-year fixed rate to 5.825% is still cheap compared to historical averages. However, home prices have obviously increased quite a bit since 2012 as well.

I don't think mortgage rates will increase much further. 6% is likely the ceiling for the average 30-year fixed-rate mortgage this year and probably next year too. Interest rates have been in a down channel since the late 1980s. I expect interest rates to start declining by in 2023.

Further, well-qualified borrowers are getting quoted much lower mortgage rates. For example, I was quoted a 10/1 ARM at only 3.25%. That's such great value.

5) Rising interest rates are a positive signal for a strong economy.

Interest rates tend to rise in a strong economy. Currently, the labor market and company earnings are strong, which causes inflationary pressure. As a result, interest rates increase to counteract such pressure and the economy cools off. The cycle tends to repeat over and over again.

When the Federal Reserve is aggressively cutting rates and when investors are piling into the safety of treasury bonds, this usually means the economy is weakening. Or, it could mean there is some event that is creating massive uncertainty, e.g. pandemic, war, terrorist attack, bubble bursting, etc.

It's clear that with headline inflation still hovering around 8%, higher interest rates are needed to cool down the economy and lower inflation.

How Housing Prices Perform When Mortgage Rates Rise

Below is a chart from the Federal Reserve that shows how housing prices have performed after mortgage rates started rising. In each period, housing prices increased. This fact highlights the strength of the overall economy trumps the braking effect of higher mortgage rates for determining housing prices.

How housing prices are affected when mortgage rates start rising

A More Normal Market Is Healthy

Unlike buying stocks with a click of a button, buying a property you love is much harder to do. There's also a lot more emotion involved in buying property as well. Once you identify a property, you'll often start imagining what your life would be like once you move in. You may already have the paint colors and window coverings in your mind!

As a responsible buyer, you should be pleased with slightly higher mortgage rates from both a short-term and long-term perspective. As a real estate investor, you don't want a repeat of what happened from 2007 – 2010. Instead, you're looking for steady returns.

As someone who wants to continue to invest in real estate, I welcome a more normal market where I don't have to compete so hard and pay up so much. In the short term, there may be some market dislocations (and opportunities). But over the long term, higher mortgage rates are good for the overall health of the housing market.

Booms and busts cause too much financial destruction and stress. Ideally, our investments move to the background so we can focus on living our best lives.

Real Estate Suggestions

If you're looking to invest in real estate more surgically, without taking on a mortgage, take a look at Fundrise. Fundrise is one of the premier real estate investing platforms with over $3.2 billion in assets under management and over 387K active investors.

Fundrise specializes in investing in single-family rental properties across higher growth, lower valuation areas of the country. If you're looking for a less volatile way to earn passive real estate income, Fundrise is a solid solution to check out.

Since 2016, I've personally invested $810,000 in private real estate funds to diversify real estate exposure and earn more 100% passive income.

If you're looking for a new mortgage or need to refinance your mortgage, check online. You'll be able to get competing mortgage rate offers within minutes. It's always good to get as many competing offers as possible when you're hunting for the best rate.

Related real estate posts:

Why Real Estate Will Always Be More Attractive Than Stocks

Why The Housing Market Won't Crash Any Time Soon

Readers, what are your thoughts about higher mortgage rates positively or negatively affecting the housing market? What are some other positives or negatives you can think of? Does the sell-off in stocks and the steadiness of the real estate market make you want to buy stocks or real estate?

For more personal content, join 60,000+ subscribers and sign up for my free weekly newsletter. I've been helping readers achieve financial freedom since 2009.

58 thoughts on “Why Higher Mortgage Rates May Be Great For The Housing Market”

  1. Is this a better time to buy or lease? I’m moving to TN for a new job. No home to sell but have saved for a healthy down payment. 800+ credit score. Would you suggest waiting until things cool off or go ahead and make the leap? BTW, first time home buyer here. And thanks for having this awesome site.

  2. Jim Johnson

    I think two of your assumptions are incorrect
    I think interest rates will be higher than 4%, I would guess that the middle of 2023 they will be 6-7 %
    Also There’s nothing normal therefore considering this a normal reaction for market is not logical..what has happened over the three years with regard to Covid and the feds actions… mass creation of dollars will have a huge effect on inflation I would guess for a decade.
    I own a lot of warehouses and commercial property so it’s good for me but in general for the average American high inflation higher interest rates less expensive housing I would say they’re all big-time negatives…

      1. Jim Johnson

        Sure I am a betting man
        You have my emai
        I will bet you 5 k
        I am not positive but I am willing to bet by the end of 2023 30 year fixed will be in excess of 6%
        I really appreciate your blog
        And site!

          1. Jim Johnson

            OK then we have a bet!!question for you if you like I do truly believe that interest rates will go to 6% by the end of 2023 and say I’d like to leverage $50,000 how could I do that? Is there some type of futures market for that?

  3. Thinking of refinancing my property at a lower interest rate and putting it into large cap tech stocks that way I’ll be able to keep my rental property but also invest in the stock market. The propertyWas 3 77,000 and now it’s valued at 702,000

  4. I wonder if rising interest rates will help maintain current housing prices because owners will be reluctant, at least in the short term, to sell their houses and give up their low interest rates. This could further depress inventory and buoy prices.

  5. Hi Sam,

    Thanks for always publishing thought-provoking posts.

    What do you think are the pros and cons of refinancing vs recasting a mortgage? Does it ever make sense to recast? Would love to hear your thoughts on this in a post (if you haven’t written about this already).

  6. Hi Sam…Read your site once every 3 days ( that is how long it takes for the swelling to go down from banging my head on the desk ) and it sounds as if
    some of the readers will not step back and observe what is happening around them. I am not afraid of property taxes, I can plan for them every year. It is the ” special assessments ” that the politicians keep adding to pay for every little whim and wish they can think of.
    As a long term landlord, I encourage my long term renters to purchase their own homes as a way to escape the annual rent increases that are issued ( and of course I will able to increase the new rent upward for the incoming resident ). But many of my prior residents will call and ask who my repairmen are to solve their problems. And it is not just the college graduates who do not know how to unplug a garbage disposal, they were accustomed to calling the landlord to do the mundane shores that come with home ownership.
    I understand that home ownership is not for everyone, and I appreciate the fact that some people prefer not to be hindered with the small problems associated with home ownership, but it does afford me to enjoy a lifestyle of being a landlord. Life is good.
    Playing the stock market is like going to the horse races, expect anything to happen and you can’t do a thing about the outcome. But with Real Estate, you can watch it slowly grow overtime, eventually to provide you a good life in your retirement years. Too many people reach for the Golden Ring on this thing we call the merry-go-round of life , only to overextend themselves. At the age of 78 I am a turtle – not a hare.

    1. LOL, thanks for making me laugh! Not sure if you are getting a concussion because my posts aren’t good or because of other reader comments and beliefs.

      The older we get, the more we become the turtle.

  7. Wankenstein

    Relying on interest rate change is an absolute assinine way to correct or control the housing market. The problem is that there are very few controls in a market which should be based on necessity and not treated as a commodity. This fact resonates in the skyrocketing national average home price that will reach $400k by the end of this year (2022).

    Hopeful buyers have to compete with cash rich conglomerates that’s only concern is to turn profit. Whatever scraps those turds leave available are gobbled up by Airbnb investors, large local investors and then single investors that canown up to 10 homes, and that is under just in their name excluding an LLC they may own.

    So, what prices (ownership and rent) for properties will our children and their children be facing in the near future? Will every state become California, where the median home price exceeds $800k currently and homelessness is rampant.
    This current bogus housing market has made the wealthy much wealthier, a small percentage of median wealth investors wealthier, and has made the low-middle and low income class poorer via increased rent and higher mortgages via overpriced homes.

    The better solution is for government on all levels and common sense to step in and place importance of homes as necessity and not a commodity to manipulated by the few. Limit the number of properties a corporation or individual can own within a specific span of years. Nationally cap percentages properties can rise or fall either annually (say 0.25%) or over a span of a few years or a decade. There should never be a 20% increase in home prices over one year. Conversely, there should never be a sudden decrease in prices as there was after the bubble burst. The banks at the time should have ate sh!t on that one and should have been forced to refinance those overpriced mortgages to a rate of one percent or less. They got nothing, but bailed out by tax payers and are getting richer by the minute in the current nonsense market.

    Unfortunately, there will be no real corrective action. Of course, banks, lenders, builders and investors will never allow this to happen. Counties and cities will benefit from the increased property tax evaluations spurred on in this bogus market and will have no incentive to act to regulate.

    I hope future generations can figure out that short term greed is not profitable for long term sustainability.

    1. Manuel Campbell

      What you advocate for (price control and regulation) has been tried many times before and has never worked.

      The first who has thought about this solution and tried it at a large scale was Diocletian in 301AD. It was 1721 years ago. You can read about what happened after this… Not sure anyone really wants to go this way. But we might go there anyway.

      Temptation to control everything is strong. Particularly amongst politicians and voters. But market forces are always stronger.


    2. Never would work and all you’d do is force rent prices through the roof with that much supply taken offline. The key is actually to deregulate construction and permitting a lot more to encourage more development

  8. Hi Sam,

    I’m interested in Real Estate and have signed up for an account at CrowdStreet. Before I venture in, I’d like to understand your process in vetting through the offerings there?

    I know everyone’s risk/reward tolerance and time horizon are different but would like to get some insight into your thought process.

    If you’ve already written about it, could you direct me to the link?

    I really enjoy reading the comments and your engagement with the audience here.

    Thanks a lot for your contribution.

      1. Definitely do your homework on the sponsors. I unfortunately took the sponsor bio for granted and got stuck in a hotel deal that the sponsor had no business running. Got left with a complete loss. Obviously Covid didnt help the situation, but it was a struggle prior to Covid. Do not rely on Crowdstreet to do the vetting for you, as they are incentivized to get as many deals funded as possible. The bad thing is the sponsor is still able to do deals on Crowdstreet. Stilman Short is the sponsor’s name by the way. Stay far far away. I have had mixed success on the site.

        1. Sorry to hear about the loss. COVID really did a doozy on the hotel industry for two years so far. It is unfortunately timing.

          But yes, every single deal before you invest sounds amazing. That’s the beauty of marketing. But as we know, not every investment makes money. Due diligence is huge. And so is skin in the game.

  9. Good article Sam. Everyone is freaking out of the rate increases, but U.S. housing inventory levels are so low that there still strong fundamentals to keep prices rising. Here in Tucson we are looking at inventory of just 1400 single family homes when a couple years ago it was common to see 3000 – 4000 on the market.

  10. Bay Area Jonny

    Hi Sam,

    While I appreciate the depth at which you think about these things, this time I slightly think you may be overthinking the situation.

    Prices are a function of supply and demand, and I think there are a few factors that will be bringing down demand this year.

    1. A rise in the 30 year fixed from 2.5% to 3.5% in the past 6 months is a 15% increase in the monthly payment. In fact, one could argue that the decrease in 30 year rates from 4.5% in 2018 to 2.5% last year drove a lot of the 20% appreciation we saw last year as the monthly payment stayed steady at the higher price.

    2. 40% of tech stocks have lost 50% of their value, and they continue to underperform. This is important because in the Bay Are most tech employees are making 50% or greater of their income in stock, and such a large decline hurts their purchasing power. This is not even to call out the S&P which has started declining as well and had likely fueled the purchasing boom the last 2 years.

    A 8-10% increase in prices this year would call for a 25% increase in the monthly payment YoY. I have a hard time thinking the market calls for that.

    Hope to be wrong, as I own two homes myself in the Bay Area.


    1. The great thing is, thinking is free! I always think back to what happened during the.com implosion in 2000, and how real estate caught fire for the next seven years.

      The best thing about investing and putting your thoughts out there is that we can literally find out what will happen a year from now.

      So what is your prediction regarding where prices are headed?

      1. I think that a 7% increase in the monthly payment is fair given the inflationary environment. Given the increase in rates, I see we end the year down 10%-15% on home prices.

        I had bought a home in 2018 in the last rush as rates rose, and I remember not six months after I closed a model match sold for 10% less. We could see prices decline 10% over the next few months – it’s coming quickly.

        Let’s see!

        1. Got it! Happy to wager whatever you want that my prediction of 8-10% increase will be closer than 10-15% decrease for the median home price in America. How about if you lose, you buy 15 copies of my book and give to all your friends :) And if I lose I’ll give you $100. FYI, I don’t receive any proceeds from the book sales until probably after 22,000 are sold or something.

          Here is the barometer: https://fred.stlouisfed.org/series/MSPUS

          1. Bay Area Jonny

            Sounds good to me man. Let’s use the lower end of our estimates so I win if there’s a greater than 1% decline in prices. You have my email!

              1. Manuel Campbell

                He use lower bound of the range for the split :
                Jonny : -10%
                Sam : +8%
                Middle point is -1%. Lower than -1%, Jonny wins. Higher than +1%, Sam wins.

                I have to side with Sam here (although I am not entering the bet). :-)

                The reason is : Low inventory due to underconstruction during the last 15 years following the housing crash and the financial crisis will have much more impact than interest rates rise.

                The reality is that if 10 people bid for a house, it doesn’t matter what the interest rate will be. The person who has more money (so to speak) will get the house.

                Another contributing factor is the that lack of housing inventory will put even more upward pressure on rents. So, I see rents going higher as well, which will put even more pressure on renters to eventually buy a home.

                I think Americans in general are still traumatized by the housing crash and the general thinking is that it can happen again anytime. But the situation before 2007 was very different. Everybody was thinking buying a house was a guaranteed way to wealth. Today, we still ear so many stories of people losing everything after they bought overpriced homes.

                I would agree with Jonny if he was talking about Canada. Prices have been rising for the last 30 years and nobody think it is possible for house prices to go down. This makes the housing market here much more vulnerable to a rise in interest rate. But houses in the USA are still very affordable.

                Since we are talking about the US housing market here, I have to go with Sam’s prediction.

                Anyway, that just my opinion. I could be wrong. We’ll see in a year or two !

                1. Sounds good. Oh man, I feel bad winning an obvious bet. But that’s the market! I would bet lots and lots of money on this bet if I could find the other side.

              2. Bay Area Jonny

                Hey Sam, you won this bet so just letting you know I bought 5 copies of Buy This, Not That to give out to friends this year.

                It’s a great book and greatly appreciate your blog! I also ended up buying a house myself in SF this year after the decline in Q4. Prices did fall in the Bay at least

                Cheers and best of luck this year!

                1. Thanks for the reminder as well as honoring the bed! I appreciate the support and I hope you enjoy the book. If you can do me a solid and leave a nice review on Amazon I would appreciate it. Happy new year!

      2. Your example about housing prices taking off after the dot com bubble seems to conveniently ignore that this was in part driven by a giant housing bubble. So let’s hope if you’re right about prices continuing to rise that it’s not because of that, or else we’re in for all sorts of pain in a few years.

    2. There are counterbalancing forces though – 1) homebuyers trading up have huge equity now 2) salaries are rising rapidly 3) stocks are still up huge from a year ago

      I’m less bullish on SF but I think nationally up 8-10% might even be conservative this year unless rates rise a lot more.

  11. Ms. Conviviality

    Higher property values means larger property tax bills so I welcome a cooling of the housing market.

  12. Higher rates are correlated with lower home prices, there have been several economic studies (https://www.bis.org/publ/work665.pdf) which have identified this to be the case. Your chart from FRED is very misleading as it only shows the short term impacts of higher rates on home prices (e.g. there aren’t any), other studies have identified that changes in interest rates lagged by eight quarters in the United States, and by two years in non-US advanced economies
    and EMEs, are negatively correlated with current changes in real house prices; this negative relationship is statistically highly significant in all cases.

  13. The housing and stock markets will continue to go up in the foreseeable future.

    There’s just way, way too much household wealth out there (https://www.bloomberg.com/news/articles/2021-09-23/household-net-worth-in-u-s-hits-record-on-surging-home-values). Boomers will continue to pass on their wealth to/buying houses for their kids.

    The markets may still flash correct from time to time but I don’t think they will stay depressed for long after each correction since there’s so much wealth ready to flow into the dips.

    1. Most wealth is tied up in long term investments very few due to inflation are floating on a huge cash cushion unless they are taking out loans to buy more assets, so I disagree I see a decrease in growth stocks that is why 1/3 of the NASDAQ stocks are down more than 50% there is a definitely a sector rotation going on, hence being broadly diversified my portfolio as a whole is only down 3% as a whole.

  14. I think it will lead to an extended flattening of growth (out to 2030) as we revert back to the long term average rate. This is after taking into consideration the incredible growth capital cities have experienced since 2017, lower borrowing ability (due to increased interest rates) and more properties coming on to the market as wealthy property owners downsize, retire, die etc.
    Just my opinion. Caveat Emptor

  15. Great way to put things in perspective. I like how it’s a good sign for the economy
    and the overall health of the real estate market.

    Although I’ve never sold a property I can imagine what you say about being a seller being more nerve wracking is true.

    1. Super stressful.. 3-5X more stressful selling than buying. As a seller, there is often temptation to accept the highest offer. But sellers need to be careful as deals do fall through with shaky finances.

  16. Manuel Campbell

    I agree with your analysis. The Fed should have raised interest rates a long time ago, if they wanted to avoid inflation. But the government needed some inflation to help pay up its debt. Now the economy is so strong, they can’t delay raising rates anymore.

    Or can they … ? My guess is they will be very cautious in raising rates. So, the economy will run hot for a while. But a little more inflation a little longer won’t hurt by reducing the government’s debt burden anyway…


    Sometime, I wish I had invested more in real estate. The stability of real estate looks so appealing. Stocks provide outstanding returns in the long term. But they are so volatile.

    Volatility of stocks is annoying, but it can also be a great advantage. It gives the opportunity to get outstanding returns in short periods of times, with relatively low risk. But we have to know what we are doing. And accept the possibility of losing money. That’s not easy to do.

    The reason why I never invested in real estate is because the metrics don’t make sense in my area. Real estate prices are extremely high in Montreal and rents are relatively low.

    For example, a listing I saw recently was at 29X gross income. I could invest in great companies like Apple or Google for approximately the same earnings ratio, but net of all expenses, with – in addition – the advantage of liquidity (I can sell shares rapidly when I want to), diversification (this quadruplex was 1.7M$, so I can’t buy 10 different properties) as well as simplicity (I don’t have to manage anything at Apple or Google)…

    Maybe I’ll do the move someday. But real estate prices would have to come down to be interesting. Or rents would have to increase a lot. It’s one or the other.

    For now, I’m happy we are getting better deals in the stock market early in 2022. This might motivate me to do more reading in search for the best deal available.

    1. Good use of leverage in real estate can drastically improve returns, if you know what you’re doing. Poor cap rates for long term renters is no good, but there are other rental models now that can make it far more attractive.

  17. Thanks Sam, great post!

    Definitely interesting data showing how house prices continue to rise after a rate increase. Very counter intuitive!

    Agree with your point that a 0.5% rate increase isn’t a material amount. My worry is that could end up being 1.5%+ however think that may get blocked based on the economic damage it could cause.

    My thoughts align quite well with your 30/30/3 rule. As house prices keep rising, in most places at a faster pace than average wages, at some point you’d imagine a certain area would hit an average house price peak. I know a lot of people don’t quite follow your useful rule, although you’d think they’d just max out based on affordability.

    Think the main counter to this theory is that people keep moving up the property ladder, extending themselves but rolling their growing deposit into the next property. As long as people keep willing to do this, it’s good for the housing market i suppose! Although might push out their potential retirement date!

    1. There is no way the average mortgage rate will go up 1.5%. OK, less than 10% chance. That would mean the 10-year bond yield would rise to 3.2%. Not going to happen.

      The Fed could raise by 1.5%, and mortgage rates wouldn’t go up that much either, b/c the yield curve will flatten.

      And yes.. those who stretch to the max are at most risk. I hope they don’t implode and cause a cascade affect and Hurt those who were more conservative.

  18. Hi Sam,

    Thanks for all the info on real estate investing. I am very much underexposed in that area and interested to increase exposure. As a investor in real estate, both properties and crowdsourcing I have two questions for you:

    1. Rentals are great, but they obviously can come with alot of headaches, such as PIA renters, repairs and associated expenses, and when housing market does go through periods of decline, these things can be even more stressful. In your articles I haven’t read much about how you handle these things. Do you use rental management companies? If so, how did you go about choosing one that was right for you? Fees? If not, how much time say per week do you think you have to “invest” in management? As a full time worker, even though I have some flexibility, I have felt overwhelmed when I think about having to deal with this stuff on my “off” time.

    2. I’ve become interested in Fundrise, due to your glowing recommendations. However, I have found it isn’t easy to find much about them on their website. Seems rather sparse in explaining their goals, and how they invest, and whether my money is FDIC insured, etc. Am I missing something on the website?


    1. Your question on housing maintenance is a good one. When I moved out of Florida, that was the reason why I sold my house, instead of renting one. I couldn’t find what I considered a legitimate property management company. Furthermore, since my employer was forcing me to move, they paid all the closing costs in my house (and they had paid those when I bought the house as a short sale, since I moved there for the job).

      Fundrise is not FDIC insured at all. I have been investing there, but you have to keep your money there for 5 years to have the least amount of fees. When you go back on the website, it shows you your earnings in dividends, and in appreciation. But of course appreciation isn’t there until they sell it, which explains why they want you to keep it for 5 years.

    2. Hi Andy,

      I manage my own in SF, and have a property manager in Tahoe. So worth it for the Tahoe one! But yes, as I age, I want to deal less with tenants and maintenance issues, hence real estate crowdfunding.

      I’m not sure what you can’t find at Fundrise. I think you’ll eventually find what you are looking for. Here’s their latest 2021 report.


  19. I think my favorite thing about FS is that your titles sound like clickbait, but the articles are anything but. Great points.

    Do you think a cashed-up buyer has an advantage while it seems that everyone has cash (or crypto) nowadays?

    1. Hah! Perhaps it takes great skill to come up with both an interesting headline and a great article. I would think coming up with an interesting title is easier.

      Yes, I think cashed-up buyers have an advantage. They always do. And crypto has been tanking, so cash buyers are even more at an advantage.

  20. I’m actually happy seeing the rates go up. But it’s tough seeing my ARM adjustment that came in the mail today – back to 3%, after being at 2 5/8% for a year, and 3% for 5 years before that. I had thought I might take extra earnings from stocks and put them into the house, but didn’t stocks sell fast enough. We’re down 10% from S&P high today, and my Motley Fool formula says it’s time to buy using 10% of my cash, but I don’t have the impetus to get it done. At least because of you, I had been investing in both Fundrise and my Fidelity Real Estate fund, and both have done well. Now I also wish the guy finishing my basement would come back and keep working (not knowing when we’d hit the S&P high, and knowing one can’t market time very well, I had planned to sell a lot when he next asked for payment, but he didn’t come last week)

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