Homebuyers resisting interest rate hikes mean mortgages pay them less
BILLERICA – Get ready to pay more for your credit card balance and adjustable home loan. The country’s central bank raised interest rates again in an attempt to curb inflation, while preventing a recession.
The Federal Reserve raised interest rates by 0.75% for the second time in just a few months. Rising interest rates affect the housing market.
An online search of homes in Middlesex County reveals prices ranging from $500,000 to over $1,000,000 per home. It is these high prices that the Federal Reserve is trying to rein in by raising the federal interest rate for the fourth time this year.
“When I hear the Fed raised the rate, I feel like someone punched me in the stomach,” said Billerica real estate agent Curtis Knight.
Knight says that over the past six months he’s seen buyers turn away from home searches due to rising mortgage rates.
“Until December, when rates were 3.1, it was the wild Wild West. The phone was ringing non-stop every day. Now it’s very, very, different. Hardly any calls,” said Knight.
Realtor Kevin Vitali says the price of a house hasn’t come down much so far.
“There are a lot of buyers waiting like they’re hoping the market is going to drop or drop,” Vitali said. “There is not enough data to know what will happen in two, three or four months, but the market is in transition and there is no doubt about it, and obviously interest rates have something to do with it. with that.”
Vitali also sees buyers wondering if the time is right, because every rise in interest rates means their mortgage is buying them less.
“If they were looking for a $600,000 house in January, they are now looking for a $475,000 house if they try to maintain the same mortgage payment,” Vitali said.