Joe Homs breaks down what the Federal Reserve's potential interest rate hikes mean for home buyers and sellers in Orange County. Three quarter-point increases could push mortgage rates from 3-3.25% to 3.75-4%, adding $300-$400 to monthly payments and shrinking buying power. Sellers should list early, ideally in January, before the market slows.
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In today's video, I'm going to talk about the big changes coming up in interest rates for 2022. Coming up next. Welcome back to the channel. I created this channel for the new and experienced investor, those who want to create the life they've always wanted through real estate. Hit that like button so that I know that you're following along. On November 15th, the Federal Reserve stated that they could raise interest rates as much as 3 times a quarter of a point each time. Let's talk about what that can mean for the real estate market. Why are these interest rate hikes in 2022 important? I'll tell you why. Because it slows the supply of money. It makes money more expensive. So currently we're at 3 to 3.25% interest. If we have to bear 3.25% interest, so that's going to bring us up to 3.75%, maybe even 4%. So just simply going from the 3, let's say 3 to 4% interest, you can be paying on the same house today for the same mortgage maybe anywhere between, depending on the price of the house obviously, but here in Orange County you're going to be paying anywhere between $300 and $400 more a month for that same house. That also kind of reduces your buying power as well. So if you can't afford that $300 or $400 a month, the only way is to buy a less expensive house So instead of buying that $900,000 house that you wanted to buy, maybe you're going to have to back down into an $800,000 house. So it does affect the real estate market. What does this mean for the housing market? Well, in my opinion, if you have something that you need to sell, you need to sell it as soon as possible. And I'm talking put it on the market January. We're doing excellent right now. We have multiple offers coming in on all of our properties that we're putting on the market. But as we go down into the spring and in the summer and then later in the fall, if they're going to raise it a quarter of a percent each time, it is definitely going to affect the housing market. It's going to have a slowdown on the amount of buyers that are out there. You may even get more sellers fearing that the housing market may take a terrible tumble Like it did in 2008, which by the way, I don't predict, but you know, you never know. You never know what's going to happen. So it's definitely going to affect it. So time to bring out the crystal ball, figure out what you think. If you're going to be okay, should sell it early? Should you wait till after the kids are out of school? Those are all the decisions that you need to make. What do you think? How do you weigh these variables? And where do you see the housing market headed in 2022? If you're new to investing and you want to learn the 4 reasons that real estate investors fail, click on this video right here. If you ever need help, please feel free to reach out anytime. I'm here to help.
