Cheap money was fueling the nation’s economy before the pandemic. But over the past year, the Federal Reserve has been aggressively raising interest rates in what has so far been a futile attempt to tame soaring inflation.
Critics say the Fed is unnecessarily pushing the economy toward recession. Economist Loren Scott has predicted a shallow national recession next year, though he expects the Capital Region will continue adding jobs over the next two years.
One thing we can say for sure is that the central bank’s rate hikes are making it more expensive to borrow money to buy real estate. The average 30-year fixed mortgage rate inched above 7% in late-October, more than double what it was at the beginning of the year.
That’s obviously having a ripple effect on the Baton Rouge-area real estate markets, though tight supply, the rising cost of insurance and high inflation also have been putting upward pressure on prices.
The interest rate impact so far is perhaps not as dramatic as one might expect; time will tell if that continues to be the case.
Read the full story about the changes being seen in the Baton Rouge real estate market from the latest edition of Business Report. Send comments to [email protected].