By Brent Ruffner | YourValley
Some Valley homeowners are reluctant to sell only to trade out their lower mortgage interest rate for a higher one, and with it a likely higher monthly payment.
Potential sellers without a solid plan are expected to wait for the market turmoil to pass, said Thomas Brophy, a housing analyst at Colliers in Phoenix.
This week, the Federal Open Market Committee raised interest rates a quarter point amid it’s ongoing inflation fight.
Officials hiked interest rates to combat high inflation, and from the end of 2021 to present marks the fastest rise in interest rates since the late 1970s and early 1980s, Brophy said.
“Are we ending this crazy run-up in rates?” Brophy said. “Do we see stability on the horizon — at least for financial markets?”
The answer could be complicated.
On Monday, the Associated Press reported the Fed could tackle each financial problem separately.
“Most economists think the Fed will navigate the conundrum by raising rates by just a quarter-point when its latest policy meeting ends Wednesday,” the AP story said. “That would be less than the half-point hike that many economists had expected before the recent collapse of two large banks. But it would still mark another step by the Fed in its continuing drive to tame inflation.”
On the positive side, inflation is cooling, Brophy said.
“It is still high relative to the previous decade,” Brophy said.
Stability of rates is what is needed for more potential buyers to pull the trigger. While mortgage rates crested 7% in late 2022, they have been dropping recently, ranging from about 6.5% to 6.875% according to Bankrate.com earlier this week. That compares with a rate of roughly 4.7% for the same time in 2022.
