Q. I saw the Fed just raised interest rates. How will this affect me as a buyer?
A. Yes, the Fed just raised interest rates and they’ll keep on raising them, so if you’re a home buyer, or even a home seller, pay attention.
As a buyer, you should not be as concerned about the price of the home, but rather the long term cost of the home. For example, if interest rates move by just one half point and home prices keep a modest appreciation of 4.7%, your monthly cost of owning a $250,000 home will increase by 13%. Annualize that over 30 years and your long term cost just increased by $58k. As a home seller, the number of people of who can afford to buy your home decreases anytime rates rise, thus increasing your time on market and possibly decreasing your selling price. So whether you’re buying or selling a home, doing it sooner than later may save you thousand of dollars. Merry Christmas!