Home buyers adjust to another federal interest rate hike
NASHVILLE, Tenn. (WSMV) - Federal interest rates have been increased again in 2022, as the Federal Reserve approved raising rates by 0.75%. i
This is the fifth rate jump so far this year.
Car financing, mortgages, and credit cards will become expensive for most consumers. The Federal Reserve’s goal is to tame inflation - but it’s also hitting consumers’ pockets.
Buying a house is a big purchase that’s become a lot more expensive.
“The tough part now is that buyers are going to be paying more for their homes, but I don’t think we’re going to see the bidding wars like we’ve been seeing multiple offers, homes have been staying on the market longer. They’re not being seen or shown as quickly as they were in the past,” said Debbie Hovsepian, with Parks Brentwood.
Debbie Hovsepian is a realtor with Parkwood Brentwood Realty. Hovsepian shared a recent example of how interest rates impacted a client looking to purchase a home.
“The rates were lower when we made the offer, and the seller did not respond in time, and we had to rewrite the offer. This time we rewrote the offer considerably less than what we came in at in the first place—that’s to fill in the gap. Over the life of the loan with the interest rate hikes, I think it was going to be about $75,000 over the life of the loan so for an average family that’s a lot of money.
Some people like John Schafer have been able to avoid high rates before the hike.
“Well, we’ve been pretty lucky because we already had a mortgage and a car loan before that happened so we got good rates, but I mean yea it certainly would have if we weren’t in that situation,” said Schafer, a Nashville resident.
Others are more cautious with their money, especially after the pandemic.
“Personally, my husband and I have looked at options of refinancing our home looking at home equity loans and have had to make some decisions maybe sooner than what we’ve wanted to try and get ahead of this interest rate hike,” said Erica Adaire, a Nashville resident.
Fixed mortgages have not been impacted by the rising interest rates.
“The desire to buy a home is always there for people. If they’ve got money in the bank to go ahead and proceed, they’re not going to have the great rates that we’ve been so used to for quite some time.
If you are in the market to buy a home, there is a sliver of good news, you don’t have to be locked into those rates, you can always refinance over the life of the loan.
Copyright 2022 WSMV. All rights reserved.