DES MOINES, Iowa (WHO) — The Federal Reserve indicated they are planning to raise interest rates this coming March. Last year, interest rates hit record lows around 2.65% however experts estimate that by the end of 2022 interest rates on a 30-year conventional loan will reach around 4%.
For Iowans, this means slightly more expensive home prices according to realtor Brett Fine with the Fine Group at RE/MAX Constructions.
“I think it’s going to be more expensive for everybody,” Fine said. “Rising interest rates although they’re historically low that rate that’s at let’s say three percent today if it jumps up to four percent that means about ten percent less house somebody can buy and that can mean a big difference.”
Fine thinks the interest rate hike will heat up the market this coming spring.
“Inventory levels are still going to stay tight,” Fine said, “I think it’s still going to be a very busy year for real estate and buyers.”
Iowa home buyers can better their odds in the competitive housing market by working with a professional and getting pre-approval on loans from their bank before submitting an offer.
However higher home prices don’t mean that this spring isn’t a good time to buy, at least to Financial Planner and President of Vivid Tax, Cameron McCarty.
“It still is a good time to buy! I mean rates will rise it’s just that keep in mind, your viewers should understand it’s still predicted to be just as low as it was pre-pandemic which was three years ago,” McCarty said, “so take advantage of these historical lows again, they’re not record lows but they are historical lows,.”
McCarty recommends checking the interest rates that different banks have to offer to find the best loan or mortgage rate.