Interest Rate Increase and How it Affects Home Buyers
The Federal Reserve just increased its benchmark interest rate by a quarter point. This is the second time interest rates have increased in three months. What does this mean if you’re planning a project? According to Mark Mitchell, our Director of Project Development for Derrick Building Solutions, it is best to arrange for financing early. “A fluctuation of just a point or two can significantly impact your overall project costs. For example, a rise of one percentage point in interest can increase the carrying costs on a $1,000,000 project by $10,000 in a year. With anticipated rate increases again this year, the sooner you lock in your financing the better interest rate you are most likely to receive.” However, a slight increase in interest rates is generally not a deal breaker. “Most clients are looking at any opportunity to receive the best overall value on a project.” Mitchell indicated, “and a bump in the cost to borrow money may just mean some other part of the project needs to be trimmed.” When you work with Derrick Custom Homes, the design-build process is all about finding your best value including the total cost of ownership. “It’s still a great time to build,” says Mitchell. To learn more about how you can get started with your custom home, contact Derrick Custom Homes at 715-246-2320 or by email to request a no-cost consultation.