MISSOULA, Mont. – The housing market in Montana is hit with another hurdle, with the Federal Reserve raising interest rates in all areas, one being mortgages.

Interest rates increase by a quarter of a percent, which may not seem like a lot due to the triangular effect on current housing options from prices, availability and demand that continue to fluctuate the market this could affect how much you to finish paying towards a new house.

President of the Montana Realtors Association, Bill Leininger outlined a brief scenario where homebuyers could find themselves where the cost of housing mixed with interest and insurance would play a large role in the extent to which your dollar will actually go.

“Let’s pretend to have a payment I can afford is $2,000 a month and the interest rates are going up which means more of my rounds of buying are going to interest and I’ll have less capacity for principal payment so that’s so much I can afford less than one house,” Leininger said.

Although this may not be directly reflected in the accommodation costs, buyers should be prepared to compromise, whether you’re looking for a larger family home or downsizing in a condo.

Current Chairman of the Board of the Missoula Organization of Realtors, mandy snook that explains who will be most affected by these interest rate changes.

In her statement, she shares what they are seeing in Missoula, “buyers who have a smaller down payment are likely to be impacted more by interest rate increases because the amount they would need to finance is greater” , Snook said.

Which means buyers may have to compromise on the size, location and age of a home, which MAR is already planning Montanes for until more housing options come.

“Just as important is going to your lender and starting this process so you understand what you can afford,said Leininger.

The two real estate agencies say their biggest tip for home buyers will be to keep a close eye on the market as it can always change in the coming years.

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