Mortgage rates have been on the rise in recent months, and they're now at their highest level in years. While this is bad news for homebuyers who are already struggling to afford a home, it's especially worrisome for those who were counting on low mortgage rates to help them buy in the near future. So, what does this mean for the housing market? Let's take a closer look.

The long and short of it is that higher mortgage rates make buying a home more expensive. When you factor in other rising costs, such as property taxes and insurance, it becomes even more difficult to afford a home, especially for first-time buyers who are already stretched thin. As a result, we're seeing fewer buyers enter the market, which is causing prices to cool off.

That's not to say that there aren't any buyers out there. In fact, we're still seeing strong demand from move-up buyers who are taking advantage of equity gains from their current homes.

How Mortgage Rates Affect Home Prices

Mortgage rates and home prices are directly related; as mortgage rates go up, home prices usually follow suit. This is because when rates increase, buying a home becomes more expensive for buyers who are taking out a loan. Thus, check out scotiabank mortgage rates.       

In fact, for every 1% increase in mortgage rates, home prices typically fall by about 2%. This means that if rates continue to rise as they have been, we can expect to see prices start falling in the next few months.

Of course, there are other factors that affect home prices as well—such as job growth and supply and demand—so it's possible that we won't see prices fall as much as they would have in the past. Nevertheless, even a small decrease in prices could impact the market since many buyers are already stretched thin financially.

What This Means for Buyers and Sellers

If you're considering buying a home soon, you may want to consider doing so sooner rather than later. Waiting could end up costing you more money in the long run, both in terms of the price of the home itself and in interest payments on your loan.

However, if you're not ready to buy just yet or if you're concerned about how falling prices might affect your ability to sell, later on, you may want to wait until things stabilize before making any decisions.

If you're selling a home, you may want to consider doing so sooner rather than later as well. With prices expected to start falling, you could end up getting less for your home than you would have a few months from now.

However, as always, it's important to weigh your options and make the decision that's best for you.

Mortgage rates have been slowly but steadily climbing for months, and they recently hit their highest level. This is bad news for buyers who were hoping to take advantage of low mortgage rates to afford a home—but it could also signal trouble for the housing market as a whole.

With rates expected to continue rising, we could see home prices start falling in the next few months. Whether you're thinking of buying or selling, it's important to stay up-to-date on these changes so that you can make the best decision for your situation.