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Ambassador
3,145,350
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Banks will always come out the winners on top of profits above all else. 

Even when they are caught doing bad things and fined Millions ... they remain a profit center. 

Jun 29, 2022 03:25 PM
Ambassador
1,860,652
Alan May
Jameson Sotheby's International Realty - Evanston, IL
A moving experience!

Higher rates may hurt their volume, but it does not hurt their profit.

Jun 29, 2022 03:07 PM
Rainmaker
1,000,443
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

The volume of real estate refinances is way down. Mortgage companies are laying off since there is not enough business to keep the employes profitably employed.

As interest rates rise in the economy (not just mortgage rates), the cost of funds increases for the banks. They work on margins and must increase their rates to maintain their profit margins. It becomes more expensive for their borrows to borrow so loan demand goes down and more layoffs take place. The business borrowers find it too expensive to borrow so they cut back on investment, cut back on expansion, and the lay off employees to try to maintain profits.

Jun 29, 2022 03:05 PM
Rainmaker
1,362,043
Gary Frimann, CRS, GRI, SRES
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

Good point.  But, they'll make it up on the credit card interest, as well as other loans.

Jun 29, 2022 07:39 PM
Rainmaker
1,424,800
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

And higher interest rates will encourage savings accounts which the banks then use to loan out.  Plus ARMs will continue to rise in interest rates, as will HELOCs and other loans.

Jun 29, 2022 04:48 PM
Rainmaker
2,683,652
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

If high rates are supposed to slow down buying and selling, it doesn't address all the hurt the collateral and related businesses are feeling. You would think that win-win solutions would be in place. Despite all this, Real Estate goes on

Jun 29, 2022 02:50 PM
Rainmaker
1,346,364
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Volume may be hurting, but profits per loan - doing fine!
Let's not weep for the banks.
Besides, rates are easing as they do heading into a recession.

Jun 29, 2022 05:23 PM
Ambassador
1,409,184
Susan Emo
Sotheby's International Realty Canada - Brokerage - Kingston, ON
Kingston and the 1000 Islands Area

Higher rates are paid out and collected both.  It has zero effect on profits.

Jun 29, 2022 05:21 PM
Rainmaker
4,508,476
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Banks work on a yield spread curve. They always get there cut!

Jun 30, 2022 04:40 AM
Rainmaker
2,124,582
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Local banks in my area are even busier with the hike in lending rates. Folks scrambling to get the lowest equity loan rate are banging on their doors. The slight hike in lending rates made an already full throttle real estate market increase speed. Panic from still not enough inventory and bidding wars has not gone away. The tightening the screws on higher interest home lending interest rates just added more stress to today's bank buying home purchasers Tony Lewis . Our six local bank lenders are doing fine no matter what the rates are. There is always a market and their profit is in their bottom line operating costs like you and I. 

Jun 30, 2022 02:59 AM
Rainmaker
808,261
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

They will shed excess expenses and still make plenty of money.

Jun 30, 2022 07:09 AM
Rainmaker
1,048,439
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Their profit is not hurt. And if it is I don't feel sorry for them...lol

Jun 30, 2022 06:06 AM
Ambassador
5,697,346
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Yes.

Jun 29, 2022 10:25 PM
Rainer
301,737
Don Baker
Lane Realty - Eatonton, GA
Lake Sinclair Specialist

they haven't paid interest in decades now.

Jun 30, 2022 07:56 PM