LAS VEGAS (KLAS)– As our economic recovery brings inflation and higher prices around the nation, interest rates could also see an upcoming spike, so a local lender shared with 8 news Now what this could mean for Las Vegas.
“I am finally relieved,” Jaime Snyder said. “I can breathe.”
Snyder just bought a home and said she got a great deal, as she joined many others who have taken advantage of historically low-interest rates over the past few years.
“I was like, how fast can you close this?” Snyder recalled.
However, it looks like this trend could soon change, as on Wednesday, The Federal Reserve pointed to a rise in the federal funds rate as early as March 2022.
“High prices fix high prices, right?” Andrew Leavitt, CEO of PIF Lending said.
Leavitt said with raging inflation leading to higher prices, this is a way to even things out.
“By just increasing the cost to potentially finance or obtain money,” Leavitt explained. “It’s going to make people just say hey, maybe we don’t need it.”
This potential shakeup is leaving many racing to lock down property as home prices continue to rise, setting a record in Las Vegas in December at $425,000.
Leavitt told 8 News Now that interest rates could go back down again even if they see a spike, but overall costs will likely keep skyrocketing.
“200 dollars a month on an interest rate that can change later potentially,” Leavitt explained. “Versus a house that’s 500,000 dollars more five years later? It’s a little different.”
Therefore, Snyder said anyone who’s able should get under the wire now and avoid any surprises in the future.
“Buy as soon as you can, I guess,” Snyder concluded.
Leavitt said it is important to note that even though interest rates could go up this year, they’re still at the lowest rate we’ve seen in approximately 70 years; around 3% for a conventional mortgage.