BEAUMONT, Texas — Southeast Texas mortgage lenders are reassuring those looking to buy or sell a home in the area that a recent decision by the U.S. Federal Reserve should have little impact on the local real estate market.
The Federal Reserve decided to raise interest rates by three quarters of a point. This decision is supposed to slow inflation and get prices under control.
While the decision is meant to help Americans, it does come at a cost.
Not only will people soon begin to pay more on their credit card debt, the cost to borrow money for items such as cars, homes and business loans will likely also increase.
Those looking to buy or sell a home are worried the increased rates will turn the hot housing market cold.
Beaumont mortgage lenders said it's not all bad news. Mortgage experts believe the change should have a minimal impact on the Southeast Texas real estate market
"Will it affect things? Yes,” Dana Johnson, Beaumont realtor, said. “Will there be people who eventually will not qualify for as much house? Yes. But people who need to buy homes are still going to buy homes."
Johnson feels raising the interest rate to what she calls a 'healthy level' could be good in a way.
"If you need to buy a house, now is still a great time to buy a house,” Johnson said. “We're actually seeing inventory pick up a little bit, so that's a good thing. Buyers have more choices."
Johnson wants people to know the raising of the interest rate is independent of mortgage rates.
"Your investments, or your 401k, or your savings account at your bank is paying you a little more interest, you know. That's a healthy thing too,” Johnson said.
Mortgage Lender Roy West is also remaining positive.
"Since we work with buyers as a lender, people's leases are going up,” West said. “Their rent's going up, so they're going to be needing to pay somewhere and buying a house, you build equity in it."
Mortgage Lender Meredith Brush believes now is a good time to do a financial check-up.
"Check your utilities and other type of bills to see if they have levelized billing options or income-based options,” Brush said. “That might help save some per month."
Brush also recommends that Southeast Texas check for warranties on their electronics or cars.
"Just make sure everything is current, so that in any case something breaks down, you have warranties or some kind of insurance to back up and alleviate that cost,” Brush said.
Regarding the issue of buying or renting a home, Brush believes Southeast Texas is unique.
"The mortgage payments are still typically lower than the rent, as far as we see it, for some of the newer apartments that are coming in the area in Southeast Texas," Brush said,
Brush encourages Southeast Texans to pay off their credit card debt and try to avoid taking on new debts.