FRESNO, Calif. (KSEE/KGPE) The Federal Reserve has raised interest rates by .75 points for the third time this year in an effort to fight inflation. The ripple effects will hit the economy across the board, especially in the housing market, where mortgage rates are currently the highest they’ve been since 2008.
“We’re really in the middle of this storm right now,” said financial advisor Brian Ullmann.
Ullmann says although there will always be circumstances requiring people to buy and sell homes, the National Association of Realtors has reported the sales of owned homes in the U.S. fell for a seventh straight month in August.
“If you got a 30-year mortgage at 3%, you’re not going to want to sell your house and take out a 6% mortgage for wherever you’re headed,” he said.
A housing market once booming during the pandemic, now come to a screeching halt.
“It’s been a very long time since we’ve had rates this time, and it goes the same for whether you’re borrowing for a house or car or anything else – interest rates are higher which means the cost of borrowing money is moving higher,” Ullmann added.
On the other hand, real estate agent Isaac Ramirez believes owning a home right now is the best thing you can do to financially protect yourself and build wealth.
“You pay yourself, you’re investing in yourself. Increasing rates, gas prices rising and the cost of food – there is some worrisome but at the end of the day, who is going to be there to protect you other than your home,” Ramirez said.
He says people in Fresno County are actually buying and selling homes at a higher rate than the rest of the nation.
“One hundred and thirty-three homes hit the market within the past 48 hours. Ninety-eight sold within that same period,” he said.
If you’re looking to buy a home, Ullmann suggests finding an experienced mortgage broker.
“Working with a seasoned mortgage broker who can find you good rates and things that fit with whatever your budget is,” Ullmann said.
For people looking to sell a home, Ullmann and Ramirez both said to sit down with an experienced realtor and set a game plan to make sure your house sells at a competitive price with other homes in the market.