What a week for the stock market, and it’s only the spring. As expected, the Federal Reserve raised interest rates a half percentage point on Wednesday in an effort to control the ever-increasing inflation. As the Fed works to curb rising inflation, many people can expect to pay more to borrow money, from mortgages to car loans. While the cost of borrowing money went up, that didn’t deter many tech companies from leading to considerable gains in the stock market, with the DOW closing up nearly 900. These gains were short-lived as many of them were dashed on Cinco de Mayo, with the DOW closing down over 1,000 points, wiping out many of the gains from the previous days.
Rising inflation is being felt by most lately and is at the forefront of many people’s minds. These increased costs are reflected in increasing food prices, building supplies, and especially at the gas pump. Most Americans saw a jump in gas prices this past week, and it was harrowing for diesel prices as they saw some of the highest increases.
While inflation is high and the cost of borrowing money is increasing, it appears these factors are having minimal effects on the housing market. As we move closer to the summer season, we’re still seeing high demand and low inventory across much of the nation. Stories of countless showings, multiple offers, and offers above listing price are becoming a common occurrence. As it was last year, it’s still a seller’s market. While this may seem like a daunting time to even think about buying a home, opportunities are still available. You must be proactive in these efforts as many homes are only staying on the market for days versus weeks or even months that we saw in years past. This means you must be deliberate in your efforts to find houses that meet your criteria, as it’s common for sellers to receive multiple offers. While the Fed’s increased rates may deter some buyers from entering the market, inventory is still generally low, which will keep up the seller’s market. If you have assessed your financial situation and are ready to enter the housing market, be sure not to take shortcuts in home inspections and other due diligence areas. Ensure you have your pre-approval letter in hand when you make an offer. Locking in a house today may become a liability in the long run if you’re not deliberate in your actions.
Next week we’ll see the latest inflation numbers for April. We can expect them to be around 8%, signifying increased costs for most individuals and families. Increased costs are no surprise for most of us as we continue to see high costs in our everyday expenses. In the coming weeks, I will talk about ways to budget effectively and opportunities to make money throughout a high inflation time.