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Consumers along with current and future real estate buyers might be in for a rough ride under the new high interest rate trend. The Federal Reserve overnight rate increase from .50% to .75% will affect the cost of borrowing funds from financial institutions, while deposits might only see a minuscule uptick in interest. As the Federal Reserve increases rates, banks are more likely to adjust rates on car loans, credit cards and mortgage loans and many other leverage products to accommodate for the future cost of funds and/or future increase in interest rates.

What that means to you? Well, you won’t be able to afford as much home in the future as you might have been able to do before November 2016. Credit card balances and car loans will no longer have low interest rates as have been offered by some of our local credit unions for some time now. So the bottom line is that as interest rates goes up our buying power goes down…

 

Interest Rates