Rate hikes can help homeowners
Last month, the Federal Reserve raised its benchmark interest rate for only the second time since 2008. This federal interest rate is used by lending institutions and banks as a guideline to determine what they will charge consumers to borrow money in all areas, including for auto loans, student loans, credit cards and, of course, mortgages. While the impact of the 0.25 percentage point increase will vary and it may take time for us to feel its ripple effect, there are many factors to consider, especially regarding home loans.
The Fed has suggested that interest rates will continue to rise, and understanding how this will impact homeowners is key to knowing your home buying and selling power.
“Housing affordability and accessibility becomes an issue as interest rates begin to climb,” says Matt Farrell, managing broker at the New Eastside brokerage Urban Real Estate.
“When money costs more for someone to borrow, the price point that they may ultimately be able to afford changes, as well.”
“When we work with clients on either the buy or sell side, we assess what their ultimate goals are,” adds Farrell. “We work to determine if there might be an opportunity to price a home they are selling compellingly, if they are getting a stellar deal on the one they are purchasing. Really being aware of your goals — and working through your big-picture investment planning with a broker — allows you both to make strong, seasoned decisions that can be sound and strategic.”
If you are considering selling, or are a renter considering your options before your spring or summer lease ends, now is the time to help get your “credit house” in order, and maximize the opportunity to make your money go further.
To learn more about how the Urban Real Estate team works with its clients to create the right plan for them, contact Matt Farrell at (312) 528-9299 or email firstname.lastname@example.org.