SOUTH HADLEY, Mass. (WWLP) – The Federal Reserve has raised its interest rate once again, in the latest effort to calm inflation.
To date, rates have now been raised to more than 5 percent, that’s a 16-year-high. The federal reserve has raised its rates by another .25 percent. That marks the 10th time the FED has raised its benchmark interest rate over the past year.
Since March 2022, the Federal Reserve has increased auto and business loans, as well as credit card rates. “The average credit card rate is something like 20.5 percent so that will go up another quarter of a percent, which makes it a little harder for people to pay off their credit cards, but the real problem with credit cards is the rates are so high to begin with,” says AIC Economics Professor, John Rogers.
With mortgage rates doubling, prices for households are going down in the Pioneer Valley. Listing prices are currently between $270,000 and $400,000. Fewer houses are also hitting the market which means fewer pending’s.
Realtor Association of Pioneer Valley says the number of houses sold is down by a little over 15 percent. Borrowing costs might also go up further after the Federal Reserve raised its benchmark rate to roughly 5.1 percent. Borrowers looking into a 15-year fixed-rate mortgage will find slightly higher rates.
Steven Laplante, Realtor and Owner of ERA M. Connie Laplante Real Estate tells 22News, “What we’re seeing in this market with the monthly interest rate, buyers are trying to keep their monthly payment down; and a lot of people are paying points because the points allow them to buy down the interest rate.”
While inflation has fallen from just over 9 percent in June to 5 percent in March, it is still above the Federal Reserve’s 2 percent target rate. White House experts say there are still potential risks of a recession as debt ceiling fight drags on.