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Interest Rates and the Real Estate Market

As we head into cooler weather here in the Midwest the federal reserve continues to raise the interest rate which has put a slight break to the read hot real estate market we have seen in Minnesota and Wisconsin over the past couple of years.

People that borrow money from banks and lenders are charged interest to borrow that money. That's how banks and lenders make money. So as the federal reserve raise the interest rate, each lender and bank increases their interest rate as well. So think of it like a rising tide. The "fed" as it's called, is the standard and all other banks and lenders follow.

With the season of November - February generally being slower in the market anyway, an increase in interest rates will certainly slow things down as we go into the holiday season. This means a savvy buyer may be able to pick up some great deals out there before the market heats up again in the early spring.


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