LAS VEGAS (KTNV) — Many in Las Vegas are left stuck and unsure of what to do next after the Federal Reserve announced another interest rate hike of 0.75%.
To put this impact into perspective, let’s say you are trying to buy a home for $450,000, you pay a 20% down payment and decide to finance the rest, the cost of your monthly payment would be about $3,000. Patrick Casale has been trying to buy a house for 18 months and says these rises in costs are unrealistic.
"I'm not going to be able to buy a house," Casale said.
This was Casale's immediate thoughts after he find out about the interest rate hike. He says he's stuck.
"I’m 61 years old I’m not in a position where I can turn around and buy a house and pay $4,000, $5,000 a month," Casale said.
Casale has been looking for a home for 18 months. Trying to get out of renting, but he says having to likely pay $1,000 more a month is not affordable.
"I don't know where we are going to get the money what happens when our economy really gets hit hard in Nevada," Casale said.
Bryan Feldman, The Branch Manager of a Local Mortgage Team says feeling frozen in place is being felt all over the country. He says three interest hikes in one fiscal year in unprecedented, but it is necessary to help the country combat inflation.
"The rates have been historically low for so long we've all gotten very used to that, but there's something called inflation that has to occur and this is to offset it," Feldman said.
He says in just a year the price for a monthly mortgage payment has gone up by more than $800. He had 25 clients with loan approval to buy a home, but in just two weeks over half of them opted out after putting numbers into perspective. Many of them he says feel stuck, unsure whether to stay renting or buy.
"It is affecting all of us in the industry and the entire housing market as a whole," Feldman said.
It's not only a problem when it comes to housing, but Mahesh Odhrani, a Financial Advisor says it will impact everyone when it comes to borrowing money. In a time when rent is so high and buying a home is unaffordable.
"A lot of people are stuck because they are not able to make decisions about what they want to do with their finances," Odhrani said.
While Odhrani says this is needed to help our economy return to more a stable state, Casale says it is just too much.
"We are in a unique situation if we don't wrap our hands around this and stop the bleeding we will all suffer immensely," Casale said.
Feldman says if you do plan on buying a home soon, compare the amount you pay in rent to the cost of your possible mortgage payment. he also encourages talking to your loan officer or financial advisor to discuss options.