SAN ANGELO, Texas – The housing market is strong and seems to be staying that way despite the Federal Reserve increasing short-term interest rates.

When the pandemic started, the government lowered interest rates on loans and started printing money to keep consumers spending despite fear of COVID — this affected everything — including homes. Economics professor Bryan Cutsinger of ASU says, “It was very cheap to borrow money to buy a home. We tend to see home prices go up during periods of low-interest rates.”

With the low-interest rates, we saw demand for homes start to rise giving sellers increased leverage in the asking price.

“They started printing money in 2020. And the values of real estate in this town have skyrocketed in that time. So if you bought a house in 2019, you might have put $100,000 equity in your pocket in the last two and a half years,” Ryan Newlin of ERA Newlin and Company said. “You might be paying more for your milk, your bread, your gas, everything else. But you went the other way on your real estate so it’s gained a lot of value.”

But since the Fed has been recently increasing short-term interest rates, what does that mean for players in the housing market now?

Short-term interest rates affect the 10-year treasury bonds which in turn affect mortgage rates. When the short-term interest rate goes up, mortgages also go up. However, the outlook on the United States differs from that in the Concho Valley and San Angelo.

“What they’re doing at a federal level with short-term rates is not affecting our long-term mortgage rates,” says Newlin.

With our interest rates rising, professionals say the market is starting to see demand cool down causing the imbalance to level out.

“Now we’re coming into a time where the interest rates have risen up so buyers are slowing down a little bit,” Newlin says.