FORT WAYNE, Ind. (WANE) — The Federal Reserve just announced the largest interest rate hike in nearly 30 years.
The Feds boosted the interest rates by .75% and experts say that is not good news for those trying to buy a home right now.
Greg Reynolds of Reynolds Wealth Management says the Federal Reserve made the decision to increase interest rates to help slow down inflation rates on products like gas and groceries.
“It affects credit card rates. It affects home mortgage rates. It affects equity lines of credit. It affect business loans. All of those rates are going to go higher,” Reynolds said.
“The Feds are raising rates in order to try and tap the brakes on the economy. Slow things down just a little bit so these price increases can roll over and we can see some moderation there. The key is not slamming the brakes on the economy,” Reynolds said.
Realtor and broker Patty Seutter of Century 21 Bradley in Fort Wayne says this is not good news for those wanting to buy a home right now though.
“It lessens the buyer’s buying power. They are not going to be able to get as much of a home as they could have before.,” Seutter said.
Seutter says that buyer power is going down signicantly for those looking for a new home.
“For example, if they were pre-approved for a $300,000 home before and it was in their payment range now they are probably going to be about a 250,” Seutter said.
Seutter says despite Wednesday’s announcement, it’s still not a bad idea to buy a home right now.
“It’s still going to be cheaper then renting a home or renting an apartment and you can always refinance when the rates start going down,” Seutter said.