Wednesday it was announced that the Federal Open Market Committee had raised short term rates by .75%. This is the Fed’s largest hike since 1994 and there are plans to raise it again as the year progresses. Federal Reserve Chairman Jerome Powell spoke about trying to depress the rapid pace of inflation while preserving a strong labor market. The highest-ever gas prices are only adding to the problem as folks are paying more to drive, costs of transporting goods rise and companies evaluate cost cutting options that may include staff reduction. Experts speak of avoiding a ‘hard landing’ which sharp decreases in the labor market would trigger. Correcting the market is tricky, especially when factors are very tumultuous.

So where does this leave the Real Estate market in Coastal VA? Well, it’s a good time to buy. I say this because the cost of borrowing money is likely to increase this year. Also, as buyers have dropped out of the market, sellers are seeing their homes sit longer. Going under contract within 48hrs for well over list and without home inspections is likely to be behind us. Is the market still competitive? Sure. Desirable homes in desirable neighborhoods are still fast moving, but it’s not quite like two months ago. This is a good thing for buyers. The rate hike might mean a decrease in spending power, but an increase negotiating power. 

Rates change. That is a fact of life. I personally refinanced while rates were low b/c the rate I had when I bought my house wasn’t as good as the rates were last year and it made sense. Rates will ebb and flow and you can refinance in the future. 

Bottom line, don’t give up on finding your dream home. Rates are higher but they are still not high. We just got used to extremely low rates. And if you are thinking of selling, remember, prior to the pandemic, homes often were on the market for months. 3 months or less is still considered a ‘sellers market’. Again, we just got used to 2 day market times but that’s extreme, not normal and certainly not sustainable. 

Everyone’s situation is different. If you would like to explore your options, give me a call. I also have great mortgage brokers on standby to answer your financial questions. Have a great rest of your day!