Outlook OK for Moses Lake with Fed rate increases

Area bankers, realtors address local impact

The local impact of the Federal Reserve raising interest rates remains to be seen long-term, but area realtors and bankers have a positive view of the near future.

"It depends on how high they go," said Mark Fancher, owner and manager of Tomlinson Black Ranch and Home. "Interest rates, when they go up, would impact any area, but it just depends on what the mortgage lenders do behind the Fed raising."

Fancher said that his agency is market driven by the buyers and sellers, and will continue to sell the community.

"If the mortgage rates follow and go up, it obviously creates higher payments, which can make it more difficult to buy as much home for the same rates," Fancher said. "That's what the issue has come down to."

Kent Jones, associate broker with Advantage GMAC Real Estate, concurred with Fancher.

"Technically, that impacts first time home buyers first and most dramatically because they qualify based on an income," Jones said. "If the payment goes up, they can't buy as much house. Other than that, you kind of have to wait and see how much it goes up and how the consumer reacts to it. Consumers don't like change."

Sherri Kasparek, realtor with John L. Scott Real Estate, said that she has a lot of buyers who want to buy, and she thought that they wanted to buy because of where the interest rates are.

"There's not enough properties out there for them," she said. "My experience is that we're dealing with a lot of multiple offers in the market. Buyers aren't finding what they're looking for, and I think there's been a little increase in the prices too, over all."

Kasparek said that she thought that over all, interest rates are still going to be good.

"I still think that there's going to be a desire to purchase," she said. "We may continue to see a surge in buyers out there scrambling to purchase things."

Rachel Pulis, commercial lender and vice president of American West Bank, said that mortgage rates have gone down.

"With the Fed raising prime rates from 4 to 4.25, mortgage rates went down yesterday and then down again today," Pulis said in an interview Friday. "It means that at least for the short term, people who are either refinancing or looking at buying a new home can actually benefit from lower interest rates right now."

Pulis said that the prime rate is a short-term rate, and mortgage rates are long-term rates.

"Oftentimes, when you see a change in prime rates, it will do the opposite to interest rates for the short term," she said. "I don't have any way of knowing for sure (for the long term), but today you get a better rate than last week."

Bank funds are based on the treasury rate, so if rates can hold steady, Pulis said she thinks banks will see some interest from people who might still want to refinance.

"In the long term, rates are definitely going up, that would be my guess," she said. "It might slow the real estate market down a bit."

Mark Neumann, president of the Columbia Basin Federal Credit Union, said that interest rates or interest costs will go up for credit union members who have credit cards or Home Equity Lines of Credit (HELOC), which are usually tied to prime.

"Over the last month we've seen a lot of increase in some other products or impacts as people have anticipated the rate increase ahead of time," Neumann said, noting that mortgage rates have increased significantly.

"They have come down a little bit, but the last four to eight weeks we've seen them really increase from where they have been," he said. "In the marketplace as a whole, we've also started to see deposit rates increase as well."

Neumann said it was tough to predict interest rates.

"In the long term, we will probably see some slow but steady increase over the next 12 months, mainly because rates over the last couple years have been at such historic lows," he said. "I wouldn't anticipate them rising to significantly high levels and really from a historical standpoint, we'll be in a very low rate environment that will be for some low cost borrowing. I don't think we'll see a significant impact if rates would increase by a quarter to a half percent."

Juliann Dodds, vice president team leader for Sterling Savings Bank, said that home mortgage rates stayed the same, so there wasn't really an impact. In the long term, so far, the bank hasn't seen a reduction in loan requests, she said.

"I think the people in our community are actually going to find this favorable because they'll have an opportunity to earn higher interest rates on their savings than they have in five or six years," Dodds said. "I think it's going to be OK; I think it's going to be a positive thing."