Housing specialist fears interest rate hike will put 'squeeze on Coloradans'

Another hit has arrived for prospective home buyers after the Federal Reserve announced another interest rate increase on Wednesday, this time by 0.75%.

Housing experts tell CBS4 this means more people will get less home for more money.

"If you're a home buyer out there trying to cut it right now, it is very difficult," said Patrick Noonan, the Colorado Housing Connects program director. "Whenever we do see a rate increase, we know that it often times puts a squeeze on Coloradans."

Colorado Housing Connects has seen an increase in people calling its hotline stressed about the current economic climate, and they've also seen a decrease in people interested in homebuying.

"Either maybe a home buyer who's going to have to a higher mortgage interest rate, or for a renters, as affordable properties are developed, with different apartments out there, it's going to make the price go up as well, and it could be reflected in the rent as well," Noonan said.

But some economic experts said this rate increase is a little too late, now that we're on a brink of a recession.

"They kept the rate at near zero for far too long, and many economists and many politicians warned against and warned that it would increase run-away inflation," said Metro State senior lecturer Darrin Duber-Smith.

With homes already in low supply, Duber-Smith said this increase will drive some homebuyers away.

"You're going to find that supply and demand will finally  equalize, because the interest rate is going to be high enough that it's going to be so expensive to buy a house that, demand is going to kind of taper off," he said.

Colorado Housing Connects is hosting several educational classes to help homebuyers through the process. The organization can also answer any questions about the current market. For more visit coloradohousingconnects.org