How to Respond to Rising Interest Rates

 


What should you do about interest rates knowing that they’re
on the rise? Tom Ross from Bay Equity is here to
explain.

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I’m here today with my preferred lender, Tom Ross from Bay Equity,
to discuss a question about interest rates: “What should you do
about interest rates, knowing that they’re on the rise?”

Tom’s short answer is: Lock your rate in now.

People have it in their head that if they just wait long enough,
they’ll end up with a lower rate eventually. But rates in the 3%
area are long gone; at our highest this year, we’ve brushed 5% and
came back down into the high fours. This time next year, the 4%
rates will be long gone as well.



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Try not to turn down any showings, if possible.

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Those in the market need to wrap their heads around the fact that
this climb in rates we’re going into will be long-term and
sustained. We’re in the midst of a sort of trade war with China,
and inflation tends to raise interest rates as well. In fact,
the Federal Reserve has gone on record to say that they’re going to
raise the federal funds rate at least four times between now and
the end of next year. Two of those jumps might occur even
before the end of this year.

Now the federal funds rate doesn’t directly impact mortgage rates,
but as it rises, you tend to see interest rates come up.

If you have any questions for Tom about rising interest rates, you
can reach him at Bay Equity by calling (602) 791-5861 or by
sending an email to tross@bayeq.com. 

For any questions about real estate in general, we always encourage
you to reach out to us here at RE/MAX Excalibur. We’d love to
answer your questions.