EVANSVILLE, Ind. (WEHT) – Inflation remains at its highest level in four decades, and everyone has seen the impacts, ranging from the grocery store to the gas pump. The Federal Reserve has attempted to combat inflation by raising interest rates. Naturally, higher interest rates are impacting the housing market as well.
“It increased pretty quickly from 3% to 5%, then it sat around 5 and now we’re seeing it around 6,” explains Aaron Cashmer with Mortgage Masters. “So this week, you have seen low 5’s to close to 6%, so it’s a relatively quick spike, no question.”
Cashmer explains that rising interest rates have led to an average increase for mortgage payments. In just a one week span, the average monthly mortgage payment in Evansville increased by $87. Still, despite higher rates, the housing market as a whole is holding up quite well to inflation.
“We don’t see a halt in the market, but it is a little bit softer than it was this time last year,” says realtor Cyndi Byrley. Similar to Cashmer’s analysis, Byrley says the impacts she is seeing are small. For example, Byrley says a home in the Summer of 2021 may have remained on the market for 1-2 days. Currently, a home in June of 2022 may remain on the market for nearly 30 days.
For those who may be worrying, Cashmer says it is important to stay calm. For recent homebuyers, Cashmer says interest rates will likely stabilize in the near future. He also explains that if you are in a situation to buy a home, now is the time to pull the trigger and move forward, as many homes are on the market in the Evansville-area.
“What I tell people is you might find your forever home, just understand you might not have a forever loan,” says Cashmer. “You can still refinance it if rates come down, and I do believe that they will, I don’t know when.”