MINNEAPOLIS (WCCO) -- The scorching-hot Twin Cities real estate market could cool down this summer.
The Federal Reserve raised the interest rate by a half-percent Wednesday. Here's what it means for borrowers: A $300,000 mortgage will cost you nearly $5,000 more a year today than it would have a year ago.
While that's not slowing some down, it is pushing other potential buyers to think twice.
WCCO spoke to some prospective, first-time home buyers who tell us they're not looking as aggressively as home prices remain high on top on higher interest rates.
Mortgage Banker Rick Fitzgerald says even though rates are at a 10-year high, if you look historically, he still thinks it's a pretty good time to borrow money. He says local demand for houses still seems high, even though some are pausing to wait for the uncertainty in the market to pass.
"It's just that it went up so dramatically so quickly, and I think that caught us all off guard," Fitzgerald said. "I am still seeing a very hectic market in the Twin Cities … I have a client that has written offers on three houses in the last three days, another one today, and didn't get two previous homes."
Fitzgerald says professionals in his field are expecting rates to go higher which could cool things off. He says it's too soon to tell how local buyers are reacting to the changes.
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