Rising Interest Rates Creating Concerns for Some Residents
WESLACO – The Federal Reserve recently raised interest rates and possibly plans to do so more times in 2017.
While some people are concerned about the hike, others do not seem bothered by it.
Higher interest rates mean good news for savers. Interest on deposits at the bank is going to tick up slowly. But higher interest rates mean more expensive borrowing for people. That includes for car loans, credit card debt and mortgages.
And if less people are borrowing money, it could affect businesses.
Jose Hernandez has built homes for 14 years. He said the rising interest rates make him worry because building homes is how he provides for his family.
Mortgage banker, Oscar Chow, has written thousands of loans over 15 years in banking and said he isn’t worried.
“In 2006 rates were 6.4, in 2001, almost seven percent. I couldn’t work enough hours, everyone wanted to buy a home,” he said.
Raymond Matustik, a retired U.S. Air Force captain, said higher interest means some of his investments profit more but for those who can’t afford should cash.
“I’m in good shape now. But for people buying, it’s a good time to buy and get a good interest rate now,” he said.
Hernandez said he believes it’s easier for people with money to absorb interest rate hikes than blue collar workers like him.
After the initial buzz there could be multiple hikes in 2017, the feds dialed it down to one interest rate hike.
CNN Money remind people things are still very positive. They pointed out savings accounts will pay more. For homebuyers, rates are rising but are still low.
Also, the federal agency can use high interest rates to keep inflation in check.