The Federal Reserve announces the nation’s largest rate hike in more than 20 years – ABC15 Arizona in Phoenix

Spread the love

Menu
PHOENIX — The Federal Reserve announced the nation’s largest rate hike in more than 20 years, in an attempt to help curb rising prices.
That means cost expenses in the short term will continue going up.
The bottom line is that Valley families will see costs rise on everything from credit card bills and loans to higher rates for new mortgages.
We spoke with the experts about what this will mean and found there are still some things you can do to take advantage of the interest rate increase.
“We’re feeling it here,” said Greg Barr, the Editor in Chief of the Phoenix Business Journal.
Barr says these rising prices are increasing at a rate unseen in 40 years.
“Phoenix in particular has seen higher inflationary numbers than the rest of the country. In fact, we were the number one metro for inflation through the first quarter. Like over 9%,” he told ABC15.
It’s a reality he says affects everything, going beyond grocery and gas prices.
“Now you suddenly get an increase in interest rates. So, for…to purchase a mortgage. So, then that puts pressure on people buying a house,” said Barr.
Bridget Valenciano, a Mortgage Loan Officer in Tempe with Summit Funding, is seeing this firsthand.
“Over the last several years, we’ve definitely been in a sellers’ market. There’s just not enough homes in the inventory right now,” said Valenciano.
She adds this is causing home and even rent prices to continue to go up.
With the federal reserve hiking its key interest rate by half a percent Wednesday, coupled with skyrocketing housing prices, Valenciano says first-time homebuyers are being affected.
Some of them are not able to qualify for a big mortgage like they thought they’d be.
“With the increase in the interest rates, let’s just say 2, 2.5% from where they were…about 50%. So, your mortgage payment with principal and interest of 2,000 is $3,000 today. So, putting that in like purchase price perspective…a $400,000 house a year ago, today is going to cost you $530,000,” she told ABC15.
Valenciano says the increase in interest rate will also directly affect credit card rates, auto loans, and home equity, but the Fed’s move is also giving Arizonans a chance to let their money work for them.
On Wednesday, the U.S. Treasury also announced its risk-free bonds (tied to inflation) would pay nearly 9.62% for the next six months.
“Any U.S. resident, any citizen could look at this because you can buy up to $10,000 worth of these series one bonds. They earn the annual rate of inflation,” said Barr.
Though there are strings attached:
“You have to hold them for at least a year and if you sell it before five years, you lose the last few months of interest,” said Barr.
Barr says paying off your credit cards monthly to dodge paying interest rates, getting a budgeting app to monitor your spending, and cutting unnecessary expenses will help soften the blow of inflation.
Report a typo

source

Leave a Reply

%d bloggers like this: