How interest rate hike will impact local housing market
COLUMBUS, Ga. (WTVM) - The federal reserve has increased interest rates again, this time by three-quarters of a percentage point in an effort to beat down inflation.
It’s the 5th increase this year and will mean higher mortgage rates for new homebuyers and those looking to refinance.
However, local realtors say homes are still selling despite continuous interest rate hikes from the Federal Reserve. Again, these interest rate hikes are done to curb inflation but experts say it’s no need to shy away from buying a home right now.
The price of nearly everything has gone up. As a result, the Federal Reserve has increased interest rates several times over the past few months hoping it will cause people to spend less, ultimately leading to a drop in prices.
Wednesday the FEDS increased interest rates by three-quarters of a point. One local realtor breaks down how the increase could impact the local housing market.
“Now we’re seeing rates that are comparable to what we were seeing around 2008 when the market kind of took a tumble there,” said Norman Hardman, a realtor with Prestige Property Brokers.
So what does this mean for buyers and sellers?
“They’re going to be paying more interest in paying that loan back if they are...financing it,” said another realtor with Prestige Property Brokers Adrian Chester.
Experts say as interest rates for mortgage loans continue to climb, both buyers and sellers will have to work together to make deals happen with the compromise being key.
“Also with sellers -- they will see a slowdown -- more than likely see a slowdown in persons wanting to actually purchase their home,” Chester adds.
Hardman is a licensed realtor in Georgia and Alabama. He says the average price for a home in Columbus is around $200,000 saying, ““It’s not uncommon to see a home start at a certain list price and for it to be reduced by like $20,000 until they meet the price that buyers are ready to pay for that home.”
Chester also sells property in the Fountain City. He says some recent home buyers he’s worked with saved money by decreasing their spending. Both realtors offer these tips:
“Marry the house and date the rate because history shows us -- even as rates climb... they historically go back down also,” said Chester.
“Put yourself in a position where you can afford a home continue to pay down the mortgage and still build equity. Even when interest rates are higher, there are still opportunities to build equity,” said Hardman.
The Federal Reserve says interest rates may continue to increase well into next year.
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