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Why Higher Interest Rates Make Property Values Drop

Same monthly payment. Very different house.

At 3%, a $2,500 payment can buy around a $400,000 home. At 6.5% to 7%, that same payment buys around $300,000.

Apartments work the same way. When debt costs more, buyers need more yield. Values compress and cap rates expand.

How much have higher rates changed what you'd pay for a deal?