JACKSONVILLE, Fla. — This week, the Federal Reserve raised its benchmark interest rate a quarter-percentage point. The Fed did that to combat soaring inflation, which is the highest it’s been in four decades.
Jacksonville realtor Mike Boyle says the move will make housing in the area less affordable. Not only will people be paying more for houses, they’ll also be paying more on the money they borrow to buy those houses.
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The Federal Reserve’s move affects how much it costs to borrow everything — credit cards, student loans and mortgage rates will go up.
“I know that eventually, it has to go back up to balance the economy; I think that now may not be the best time to do it,” William Li said.
Li plans to buy a house in the coming years, but he won’t be making that big purchase any time soon.
“When the interest rates go up, obviously it’s going to make your monthly mortgage payment higher,” Boyle explained.
He says payments will be higher, but not by much in the short term.
“But really a quarter-point, half a point isn’t crazy yet,” he explained.
Boyle says people see interest rates rising, and that’s what’s fueling the buying frenzy.
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And because the Fed plans to raise the interest rate several more times this year, Boyle says if you’re looking to buy a house, doing it sooner rather than later is better.
“If you’re going to be getting a mortgage for 30 years, yeah, you want to buy now, even though the prices are a little high. If you’re going to be a cash buyer you might want to wait a little bit, you might want to see if the prices drop,” Boyle explained.
Li hopes the economy stabilized soon so he can buy a house one day.
“The consumer and the middle-class family does have to pay those costs upfront so it definitely helps if it’s not too high,” Li said.
Click here to learn about how low home inventory in the Jacksonville area is driving up prices.
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