SPRINGFIELD, Mo. – Another month, another federal interest rate increase.
“You don’t see [an increase of] .75, then .75, and then another .75 percent.” Stephen Evans, owner of Evans Wealth Planning said. “We haven’t seen that. It’s happening really, really quickly.
This means people who need to take out loans for almost anything may see higher payments each month.
“They are trying to cool the economy down by tightening the money supply.” Evans said. “Car loans have gone up. Credit cards have gone up. Any kind of loan you’re getting, the interest rate is going to increase.”
This also includes the housing industry.
“For us, it definitely slows the market down a little bit, which is what the Fed wanted to happen.” Chris Bryant, a broker, and business coach with Murney & Associates said. “Basically, when the economy gets too hot, obviously the Fed wants to slow that down in order to temper down inflation.”
Bryant says the move affects first-time home buyers more in a market that’s slowly returning to normal.
“In a balanced market, in our market, you would have anywhere from 2,000 to 2,500 homes in Green Christian and Webster County. We have about 700, 750 right now. ” Bryant said.
However, the increased rate will not only affect who can buy, but what they can get.
“If you bought a $300,000 house last year, your payment interest rates around 3%, your payment would have been about 1300 bucks a month. Today your payment [if you got that same loan today] is 1,800 dollars a month.” Evans said.
“Affordability is what changes. Where they may have been looking at a $300,000 home, now they need to look at a $225,000 home. The challenge is that’s less of a home than it used to be.” Bryant said.
Evans’ advice is to take care of what’s in front of you and hold off on that next big purchase.
“The best thing to do now is to pay off your debt. To learn how to save Live within your means. It is a time to hunker down.” Evans added.