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Fed Raise interest rates - What that means to Real Estate

Updated: Jan 5, 2023

For the first time in 3 years, the Feds raise interest rates.

With inflation at an all-time high, the Feds are attempting to slow the economy by raising the cost of borrowing. Some refer to it as ‘economic reverse engineering’ – I call it a Real Estate Roadblock.

While ¼ of a percent doesn’t seem that much, they are talking about raising rates three more times – this year alone.

So, what does all of this mean to us? To you?

Homebuyers qualify for loans based on how much they can afford each month. Therefore, when interest rates go up, so do buyers’ monthly payments. This directly and immediately impacts how much house a buyer can afford. Thus, the price you can get from selling your home is reduced.

If, for one second, you are even considering selling your home in the next year– do not wait! With the passage yesterday of the first-rate hike in 3 years, and more coming, that is potentially hundreds of thousands of dollars out of your pocket when you sell – if not more.

Give me a call to evaluate your specific situation 510-932-2964

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