As if wasn’t already tough enough to make a major purchase at a time when living costs are skyrocketing, the interest rates to finance those pricey purchases are going up. Now consumers are confronting a tough question: Should they pause their searches for new houses, cars and other big-ticket items in the hope that interest rates will fall whenever inflation is reined in?
It’s a question that gains urgency with every Federal Reserve meeting about a key interest rate. The central bank is scheduled to announce its latest rate decision Wednesday afternoon. Consider the rates people are staring down. For a home, a prospective buyer would be facing a 5.54% rate on a 30-year fixed mortgage, Freddie Mac
said last week. That’s up from 2.76% a year ago. For a new car, five-year auto loans climbed to 4.86% in late July, up from 4.47% in April, according to Bankrate.com. Even for the everyday goods and services a person puts on their credit card, the rates are climbing. During the second quarter, annual percentage rates reached 15.13%, up from 14.56% in the first quarter, according to LendingTree. This month, the average rate on all new credit cards is 20.82%, up from 20.17% a month ago. The Fed is expected this week to authorize another hike for the federal funds rate, which influences the interest rates lenders charge people buying homes, cars or using a credit card. The F …