Interest rates on the rise

Interest rates on the rise

Interest rates on the rise.

The Federal reserve announced today that it is accelerating the increase in interest rates to fight inflation. While this was expected, the scope and commitment to decreased inflation has caught some experts by surprise.


What is the Fed doing?

They will be cutting back on their stimulus by ending the monthly bond-buying that kept interest rates down. But the biggest announcement was that they will raise rates three times next year. This will have a chilling effect on the refi-market. This means mortgage companies; title insurance companies and appraisers will see a sharp drop in business.

Why is the Federal reserve raising interest rates?

The Federal Reserve’s target for inflation is 2 percent. The current rate of inflation is at 6.8% (quickest pace in the last 40 years) and raising interest rates is their main tool to slow down the economy and slow inflation.

How will this affect home sales in Minnesota?

Rising interest rates will decrease a buyer’s affordability and will knock out some buyers from the Minnesota real estate market. This will decrease the pressure of multiple offers and high yearly appreciation. This is a healthy turn of events for the stability and future of Minnesota real estate.

I hope the blog on this subject was helpful.


Please reach out to me if you have questions about housing in Minnesota at 612-386-8600.


Look for more articles and videos in the future on various aspects of real estate and our state of Minnesota.

Real estate is a wonderful investment!


Jeff Anderson

The Anderson Team

RE/MAX Results




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