Rates move the whole affordability equation, so they end up repricing every deal, in real estate and beyond. When rates are low, a given rent covers a much larger payment. More properties cash-flow, and demand for investment real estate rises. Many rental owners who bought or refinanced in a low-rate stretch are cash-flowing comfortably today because the payment is small relative to what units rent for. Now take the same building with the same rents and finance it at around 7% instead of around 3% (round, illustrative numbers rather than a market quote). The deal can flip from positive to negative cash flow without a single thing changing about the property. That is why buying new rentals is simply harder when rates are elevated. One consequence we see: when new purchases don't pencil, investor activity shifts toward 1031 exchanges, trading an underperforming property for one with better cash flow rather than buying fresh. Selling a single-family rental to move into a small multifamily with stronger numbers is a common version. More broadly, rates set the cost of money and the return on safe alternatives, so every asset reprices around them. Banks often benefit from more borrowing activity in low-rate stretches, while rate-sensitive and heavily leveraged assets feel higher rates most. The durable takeaway: underwrite at the rate you'll actually pay, then stress-test the deal for rates moving against you. Nobody can promise where rates go next. You can watch where they actually sit on the Mortgage News Daily rate table, right here on our site.