August 12, 2004 at 1:58 AM CDT - Updated July 3 at 8:28 AM
AUGUST 11, 2004 -- Posted at: 10:00pm CDT
JONESBORO, AR - Federal reserve officials announced Tuesday that short-term rates were going up one quarter of a percent. That move effects items such as credit card interest rates. However, those aren't the only rates that are increasing. The home mortgage fixed rate is also going up, but it apparently isn't effecting new home construction in Jonesboro.
"We've had a very strong economy here, even though the national economy has kind of been in the slumps, but Jonesboro's continuing to grow. We've had a lot of new housing, a lot of construction going on all over Northeast Arkansas really," said home mortgage officer Jerry Myers.
Myers said the home interest fixed rate has gone up about 3/4 of 1% over the last 60 plus days.
Doug Doggett, Vice President and Business Development Office at Regions Bank, said, "...and even though the rates have ticked up a little bit, it's still a great time to borrow. The rates are really, really low, but when it comes to investing, those people who are trying to save, a higher rate's gonna benefit them."
That means people are putting their money into savings, CD's and other short-term investment options now; waiting for the interest rates to increase even higher. Northeast Arkansas' competitive banking market is working to investors' advantage.
"Each day you look and see what the banks are doing. One's trying to out do the other one each day for the last month it seems like, so yeah, rates have definitely been going up," added Doggett.
As interest rates continue to rise, Jerry Myers thinks new home construction will slow down some, but for now, with rates at the second lowest level he's seen in more than 20 years, it's 'full build ahead'.
"Rates are still good. People are still buying. There's a lot of refinancing going on," added Myers.
The Federal Open Market Committee is expected to suggest further rate hikes "at a measured pace.'' The FOMC is scheduled to meet again September 21st.