The Federal Reserve is expected to increase interest rates again this week. A higher interest rate means mortgage rates will keep rising as well. That translates to less buying power for Central New York’s first time homeowners.
Home HeadQuarters in Syracuse helps an average of 250 people a year buy their first home. CEO Kerry Quaglia said an increase in rates makes it harder for people to qualify for that initial loan.
"So it was where a year ago maybe you needed an income of say $35,000, if you didn't have a whole lot of debt that you could qualify for a starter home. Today, it's more like you'd need $42,000-$43,000 to qualify," Quaglia said.
Buyers would also face higher monthly payments. Quaglia said for every 1% the Fed increases interest rates, mortgage payments go up an average $80 a month.
And Central New York buyers are facing a particularly tough market right now. Quaglia said a confluence of factors are creating a perfect storm.
"It's great news in that our economy seems to be growing with the Micron announcement and all of that, but it means that housing prices have not gone down. They've not retrenched. So we've got continued high sales prices on homes, in a higher interest rate environment," Quaglia said.
Quaglia doesn’t want potential first time homebuyers to be afraid of the current market. He said buying a house is always a process and it will take time to get into a position where you can buy a home. Home HeadQuarters offers a variety of resources for those looking to buy their first home.
