Rising interest rates could impact housing market in Cedar Park and Leander

The Federal Reserve opted to raise short-term interest rates June 14 by a quarter of a point, the third time since December the central bank has opted for a rate hike.

Some local real estate experts differ in opinion on whether the rising interest rates will significantly impact the housing market in Cedar Park and Leander.

Vaike O’Grady, the Austin Regional Director of Metrostudy, said as home prices continue to rise, increasing interest rates will put a dent into people’s ability to purchase a home.

During a May presentation, she calculated numbers on the affordability of living in Leander with certain mortgage rates. She used a base income of a household earning $125,000 annually seeking a 30-year fixed mortgage. By increasing the interest rate by 1 percent, the formula lowered the cost of a home that a household could buy by about 6 percent.

“It’s striking how much an impact a point can have on someone’s ability to purchase,” she said.

Steve Crorey, a broker with Sierra Homes Realty and president-elect of the Austin Board of Realtors, said the hikes in interest rates that have occurred in the past six months have not had a negative effect on the housing inventory in the area. In fact, he said a lack of inventory is still the driving force in Cedar Park and Leander.

“Interest rates at this point have not had a big significant change for our market,” he said.