MONTGOMERY, Ala. (WIAT) — Those involved in Alabama’s real estate industry say the Federal Reserve’s latest interest rate hike of .75% and the three before it just this year are making homebuyers pickier.

Co-owner and managing broker of LanMac Realty Joshua Noah says the interest rate hikes are causing some buyers to be a little more cautious.

“If I’m going to pay 6%, maybe this house isn’t the right one. Maybe I’ll wait and get into a small bidding war on the next one,” Noah said.

Noah says buyers who started off the year with a price range in mind are now reconsidering, knowing over time they’ll be shelling out more for their mortgage.

“On a $250,000 house, an increase from 5% to 6% over 30 years relates to about $150, give or take, on the monthly payment,” Noah said. “So that has actually reduced some buyers’ buying power.”

The Federal Reserve’s decision comes after a series of increases this year aimed at stemming inflation, which hit 9% in June.

The Montgomery Association of Realtors’ broker associate Ryan Beesley says he expects to see a slight slowdown in home selling.

“I also think we’re just going to see people take a breath before they buy a house. They’re not just going to go out and look at three houses and pick one,” Beesley said.

That slowdown, Beesley says, might actually make it a good time for first-time buyers.

“It’s a great time for them to buy. Interest rates are higher, their buying power is a little bit decreased, but they’re just not being squeezed out by people who can pay cash and are buying in a frenzy,” Beesley said.

The average list price of a home in Montgomery for the month of July so far is about $263,000, up 7% from July 2021.