Yes, it is happening.  Slowly, but surely the interest rates are rising.  It is almost like the government is trying to slip it past us, because the rate has risen about 1.5% in the past 18 months. 

I wanted to comment on this, because now all you hear about is people saying, “I told you the real estate market would crash!”.  The real estate market or bubble has not crashed in any way.  If you are living in West Palm Beach, Florida and you have owned the same house for the past 5 years, you will still make a huge profit on your home when you go to sell it.  It is true that you will not be able to make as much as you could have a year and a half ago, but the market has not crumbled.  This is the case for many markets that have simply cooled off.  You may have to drop your selling price by $20,000, but if you are making a $100,000 profit, stop being so greedy!  I know someone whom bought a house in South Florida for $80,000 about 8 years ago.  They recently put it on the market for $309,000 and it did not sell.  In the post real estate boom, you have to price your house to sell, not to maximize your profits. 

Another lesson to learn in the post real estate boom is do not sell your house if you do not want or have a reason to move!  This is completely silly, because you will cash out your equity and then go and buy expensive when the market is not good!  Plus, this is your residence we are talking about.  It costs a ton of money even to move locally. 

The real estate cool off means that adjustable rate mortgages and real estate flips will not be popular anymore.  This is a great thing for the average consumer like you and me!  Mortgage loan sharks will not try to sucker you into a shiny ARM anymore, because the ARM is not shiny anymore!  Real estate investors will not be buying every property they can get their hands on which will give the buyer some more flexibility and buying power.  By the way, if you are in an ARM and you do not plan on moving anytime soon, go refinance now!  I don’t care if you have to pay a prepayment penalty, it will be worth it in the long run!

So the point of this post is for people to stop getting so agitated about rising interest rates.  The real estate market is like every other free enterprise market in the world, it runs in a cycle.  What goes up, must come down.  What goes down, will come back up.  You just have to be willing to ride out the waves.