One Interest Rate Hike Is Just The Start; What This Means For Homes & Cars
MIAMI (CBSMiami) - You're hearing a lot right now about interest rates. That's because inflation has hit a 40 year high, and now the Federal Reserve has approved the first interest rate hike in more than three years.
With that in mind, the two big-ticket items many people deal with are mortgages and car payments.
CBS4 looked up the latest median price for a home in Miami-Dade. According to Realtor.com, it's $485,000. With good credit, 700-10, 20% down ($97,000), securing a 30-year loan with 4.8% interest rate, the mortgage is over $2,000 a month.
Now raise the interest a quarter percent, so now, 5.05%. The monthly payment may go up by $60. That's the cost of about two meals at restaurant a month. No big deal? There's supposed to be six more increments by year's end to 1.9% total.
Now a new mortgage payment goes up to over $2,500, a difference of over $6,000 a year.
So it's expected even more people will get in line to lock in a home, before the highest interest rates happen at the end of the year.
The Miami Report, which is produced by International Sales Group, tracks real estate data. In February, single-family homes set a new all-time low inventory.
"Perspective buyers were looking at houses, and they were getting frustrated at the lack of inventory they might have zeroed in on 1 or 2 choices but they didn't make a decision yet because they were waiting for other choices to show. Now the Feds decide they're going to raise rates as promised, now those same buyers are coming back into the marketplace almost immediately. I'm going to lock in that mortgage rate now," ISG founder Craig Studnicky said.
Looking at cars, for a $25,000 vehicle with a 72-month loan, locking in the interest rate of 4.8% before the feds change it, the difference comes out to about $210.
