NEW BERLIN — U.S. Federal Reserve Board Chairman Jerome Powell announced a third consecutive interest rate hike of 0.75-percent, bringing it to a range of 3—3.25-percent. This is the highest Fed rate since 2008, and policy-makers have signaled they are not done yet.
All of this means what you buy will cost more, including getting a mortgage to buy a home.
Janet Reyes feels caught in the middle of this interest rate crunch. She is happy she sold her New Berlin house for $35,000 over asking in about 12 hours. She is sad she cannot bring her 3-percent interest rate with her, expecting her next mortgage to be, “For sure over five and possibly six.”
According to Bankrate, the average 30-year fixed home loan rate in Wisconsin is at 6.37-percent.
This means the cost of a mortgage alone, not including insurance and property taxes, will cost hundreds of dollars more each month.
Realtor Courtney Stefaniak with The Stefaniak Group explains, “We were spoiled hovering around 3-percent. In the grand scheme of things, 5 to 6-percent is still historically a really good rate.”
Stefaniak reminds buyers you will soon have your negotiating power back, “The market's definitely shifting. I think buyers have a good opportunity to maybe get in for asking price or even under asking price.”
With the interest rate hike, she suggests decreasing the price range you are looking for by $50,000 to $75,000.
Stefaniak also reminds us of the saying: "Marry the house. Date the rate." Meaning you are not stuck with the interest rate forever and always adjust the interest rate over time.
The Greater Milwaukee Association of Realtors shared that August sales decreased:
