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 keeps gaining urgency. A week after the Federal Reserve boosted a key interest rate for a fourth straight time, Friday’s jobs report showed the economy adding a stronger-than-expected 528,000 jobs in July. That led Wall Street investors to anticipate another significant Fed rate hike in September after July’s 75-basis point increase. Federal Reserve Chairman Jerome Powell has previously said the economy is sturdy enough to handle the strong medicine of rate hikes, and a robust jobs report will likely bolster that view. Consider the rates people are already staring down. For a home, a prospective buyer faces a 4.99% rate on a 30-year fixed mortgage, Freddie Mac
said last week. That was up from 2.77% a year ago. For a new car, five-year auto loans climbed to 4.91% in early August, 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. In July, the average rate on all new c …