Mortgage rates hit highest levels since 2009 after federal rate hike
PHOENIX (3TV/CBS 5) -- The Federal Reserve issued the biggest rate hike in 22 years by raising interest rates by a half-percentage point to control record inflation. As a result, a 30-year-fixed mortgage is now averaging 5.27%, the highest since 2009. “We’ve seen some signs of it slowing down just a little bit,” said Eugene Quackenbush, the designated broker and founder of real estate company ‘Get Your Nest.’
Quackenbush said the rate hikes are already affecting Arizona’s housing market. “What we are seeing is sellers aren’t willing to move because their interest rates are going back up; that’s pinching inventory a little bit, but if people are having to buy right now, they’re going to have to put some more money down to have their monthly payment where they can manage it,” said Quackenbush.
Economist Rick Merritt, the President and Founder of Elliott D. Pollack and Company, said the central bank needs to tread carefully with these decisions. “The fed has to be very careful moving forward that they don’t tip the economy into a recession,” said Merritt. “It is like a tight rope, and if they squeeze too hard or become too aggressive, it’s going to set back business spending and investment.”
While it may slow a hectic housing market, Quackenbush believes the move will squeeze out cash-poor buyers. “Having to get that extra money, so where’s it coming from?” said Merritt.
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