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‘I recommend that you make a decision very quickly’: Charlotte realtor speaks on impact of interest rate hike on housing market

The Federal Reserve is raising its benchmark interest rate by a half-percentage point.
Federal interest rates are set to increase in hopes of combatting inflation.
Published: May. 4, 2022 at 10:25 PM EDT
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CHARLOTTE, N.C. (WBTV) - The Federal Reserve announced Wednesday that it was raising its benchmark interest rate by a half-percentage point to combat inflation. The Fed’s goal is to slow spending and economic growth by making it more expensive for people and businesses to borrow.

In the wake of Wednesday’s announcement, Charlotte realtor Alex Lopez, of Verge LLC, is encouraging home buyers and sellers in the Charlotte market to act fast.

“If you are in the market right now, I recommend that you make a decision very quickly, especially if you are active because I do suspect rates to go up, but what we will not be able to determine is how fast they go up and what speed,” Lopez said in an interview with WBTV.

He said he predicts that the rate hike will ultimately cause Charlotte’s hot housing market to cool down.

“There’s definitely going to be a little bit of cooling off because of just the affordability of home,” said Lopez. “With the median sales and average sales price increasing so much year over year, also with interest rates rising, I will say the monthly mortgage expense for buyers in the market are getting a little aggressive. It will price people out.”

Lopez said home prices could be impacted if demand softens and there are less buyers in the market, but to see a sizable drop in prices, the inventory of homes would have to increase to the point where there are more properties than active buyers. He noted that he does foresee this happening, but explained that the market will dictate the timing.

One of Lopez’ clients, Patrick Menefee, lives in the Madison Park community with his wife, Jami, and infant daughter, Adeline. Menefee said the family is currently hoping to move to a new home with more space.

“We have a lot of toys,” Menefee said. “We just need somewhere a little bit bigger. We want a place with a yard. The townhouse has been great for what it was, but really want to have a house to raise a family in.”

He said they originally wanted to find a bigger home in the city of Charlotte, but have had to look outside of the city due to home prices.

“Last year we were looking at places that were a lot closer to here and we now are priced out of those, and we are looking in Union County and Fort Mill as a result,” Menefee said. “The longer we wait on the sidelines, the smaller the house is and the further away it gets.”

The family spent part of Wednesday evening looking at houses. They hope to find a home to move into soon.

“We still want to find the right one,” he said. “I mean we’re not going to jump on something we don’t love, but we also know there’s a sense of urgency.”

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