FED Interest Rate Increase
This past week, the FED raised interest rates (again), this time by .75% to attempt to slow high inflation. As a result, mortgages are at their highest since 2008 (6.2% on a 30-year fixed as of this writing). The housing market was red hot for quite some time, however with rising loan rates the slow down has been surprisingly quick. The complexity of our economy will lead to ripple effects across the board, and the impact will be seen in industries as diverse as retail, manufacturing, and construction. Coupled with a supply chain that is still struggling from over 2 years of COVID and a possible recession on the horizon, we will see industries directly related to housing affected first. So, what does this mean for our clients?
In real estate, new construction will continue to slow, and agents/lenders must be creative to sell homes. Think variable interest rates which were all the rage in the early 2000s. Tip – Let your customers know you can find them a home they want and CAN afford.