(WWLP) – After seeing house sales come down last week, the mortgage interest has seen a slight increase yet again.

The mortgage interest rate in Massachusetts is 3 basis points higher than the national average rate of 6.3%, according to Zillow. As of September 25, the interest rate has increased to 56 basis points from last week’s average Massachusetts rate of 5.83%. According to Mark Howard, Springfield College associate professor of economics, this has slowed down the housing market. This has also caused a decline in the number of sales, resulting at the beginning of a downturn.

According to Howard, housing prices started to go up before the pandemic started in 2019. “They’ve gone up in Hampden county by 10%. Median housing pricing has gone from $100,000 in August of this year to $300,000, a 55% increase,” he said. “Houses have become 55% expensive and the interest rate is doubled as such, on the interest rate alone, the average house is probably costing as much as $500 to $600 more a month in terms of interest payments.”

The prices of houses and rentals have been difficult for many in the western Massachusetts area. “I wouldn’t be surprised to see that come down a little bit, probably a more realistic scenario is that it levels out, we don’t know if we will see it actually decline in home prices, that’s actually pretty rare for home prices to go down. 2006 to 2008 they did however come down in home prices,” expressed Howard.

This issue is a result of inflation. The Federal Reserve is wanting to control inflation by influencing interest rates. In a recent FOMC statement from Federal Reserve, they said, “the committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the long run.” This has led to the federal funds rate ranging from 3 to 3 1/4 percent.

“The Federal Reserve wants to see a little more unemployment. Their number one goal is to keep employment high in the face of the inflation we have seen recently,” said Mark Howard, Springfield College associate professor of economics. “It’s one of the main tools they have to curve that inflation is to slow down the economy with higher interest rates.”

For those looking to rent or buy, credit may be another problematic factor in securing a house or apartment. “It used to be that you had the right credit to rent a place when it was $900 a month or $1,000 a month, but when it is $1600 a month, you don’t have the credit for that. Due to the interest rate and increase in home values,” said Howard. “For the individual, it’s really tough, unfortunately, what the market tells you to do is look at a little smaller place maybe, you might have to move a little further away from your desired location.”

However, if you have a low credit score, there are local agencies and companies to help bring your score to a better standpoint. “The bottom line is the market is really tough right now, with the kind prices we have seen in the home values and in interest rates,” explained Howard. “The future of the economy looks very good and is in a pretty good spot. Credit card debt is actually lower today than it was in 2019, the average credit card balance. People’s personal financial situation is in a pretty good spot, much better than it was in 2007, and the economy itself, the unemployment rate is pretty low by historical standards.”

Howard addresses that as bad as the pandemic was, there’s no doubt, that it created a lot of technological change and that change is going to provide profit opportunities for businesses. “I’m actually pretty confident of the future we have,” he said. “We certainly have some hurdles to get over, but the success of the policy of the Federal Reserve right now will be a big factor.”