9 News: Interest rate hike pause welcome news for Colorado homebuyers

September 22, 2023

Kulkarni said the hikes, while painful for consumers, are helping curb inflation.

"It did slow down the economy. We moved from 3 percent to 7.5 percent which is more than double in less than a year. And that’s why for a while, we did have some problems with the banks tackling this higher interest rate and so there are some downside from raising it too fast and too much," Kulkarni said.  “If you focus only on inflation, yes there is a slowdown because we moved from 9 percent to almost 3.7 percent. And that is what the Federal Reserve really wanted, we call it inflation targeting. And if you target the inflation, then raising the interest rate makes sense but obviously there are some side effects with that."

Kulkarni said the fed has signaled more hikes are coming later this year and into 2024 as they try to bring inflation down to two percent around the country. 

“Are we there yet? According to the Federal Reserve, no. Because we want to get close to two percent inflation rate," Kulkarni said. "In my opinion, we are already there. I think it’s either time to stabilize the interest rate, not raise it anymore and we can tackle 3 or 4 percent inflation rate, that’s not a problem."

Any rise in interest rate hikes from the fed, he said, are good news for getting more out of your savings but not if you're trying to buy something big, especially if those the 30-year mortgage rates rise with the hikes.

But for now, Abrams said just make sure you can afford what you buy.

"I think forecasting what's going to happen with interest rates both for the fed and for 30-year mortgage is just too difficult to predict," Abrams said. "Really, the question is can you make your payments now? Because if you can make them now and they decrease in the future and you have more money in your wallet, you're going to be okay with that. So really making that decision for today is much more important."