By Ethan Kibbe
ERIE, Pa. (Erie News Now) – When the pandemic hit in 2020, the economy ground to a halt.
No one was spending, so the Federal Reserve slashed interest rates to nearly zero, jumpstarting the economy, especially the housing market.
“All of a sudden, it transitioned into a seller’s market,” said Realtor Marsha Marsh. “Sellers were thrilled. People were selling their houses that didn’t really need to sell or wanted to sell but thought they better sell.”
Marsh says super-low interest rates enticed potential buyers, looking for deals.
But easily available money spurred rampant inflation, so rates are now rising to re-settle the market.
“People think that’s the way it’s always going to be, and when it corrects itself, which is what’s happening now, then people get panicked,” she said of the rise in rates.
Now, house prices are dropping because buyers have to pay more interest.
For buyers, it could be an opportunity to pay less, then rework their loan when rates come back down.
“They can refinance,” Marsh said. “Or they can do an adjustable rate for two or five or 10 years. You have to be a creative thinker about what you want to do.”
Amid economic uncertainty, Marsh says one thing is certain: rates are almost guaranteed to rise again.
“The ship has sailed for the 2.75 for the time being,” she said of low interest rates. “Maybe two, three, five years it will change, but for now, we’re not going to see that 2.75 or three or 3.5”