NORFOLK, Va. — Over the past few years, folks in Virginia faced banking uncertainty and company layoffs along with the rest of the country. These circumstances lead some economists to expect a recession.
"What does that mean? It means that economic growth in the United States will be very close to zero or it will be negative in the latter half of 2023 and possibly into 2024," said Bob McNab, an economics professor at Old Dominion University.
The economy's a balancing act, McNab explained.
The Federal Reserve raised interest rates Wednesday.
"By increasing interest rates at a fairly rapid pace, their goal is to take some of the fuel out of the economy by decreasing consumer and business demand. Today’s increase it’s just another step is just the Federal Reserve's efforts to combat inflation," said McNab.
McNab said the hike can be good for people to earn more in interest rates on saving accounts, but increasing interest rates can make it more expensive to borrow for and buy a house.
Realtors in Hampton Roads said while the interest hike could make it more expensive to refinance a mortgage, they're not too worried about Virginia's housing market.
"We tend not to focus on the mortgage rates because those change. They go up and down," said Sam Koch, a realtor with HRVA Homes.
Koch and McNab said Hampton Roads should handle economic changes well. McNab said the area can weather recessions since the federal government makes up a large portion of the regional economy and those jobs are more certain than some in the private sector.
Financial analysts said rather than worrying about market mortgage rates, home buyers should focus on things they can control like improving their credit score, saving for a down payment and getting the best rates they can for their situations.
