ST. LOUIS – Last week, the Federal Reserve announced another increase in interest rates to battle inflation.

FOX 2 sat down with real estate agent Becky DeMond, a broker and team leader for RE/MAX Preferred in Swansea, Illinois, to find out what this means if you’re looking to buy a new home in the new year.

“We definitely have the housing shortage still, even though the rate is high,” DeMond said.

For the seventh time since March, the Fed has made it more expensive to borrow money as it stays focused on fighting inflation. DeMond says prices are starting to stabilize as a result.

“They’re not going up, but they are staying the same,” she said. “We think that {as for} the housing market, the prices will stay high.”

On Wednesday, Dec. 14, the Fed raised the interest rate another 0.5%. It was 0.08% in January, but it’s up to 4.5% now.

Here’s what this means for homeowners: if you are taking out a fixed 30-year $300,000 mortgage, your now paying about $500 more per month than you were at the beginning of the year. This is simply because of the higher borrowing costs.

Jim Diehl has lived in Creve Coeur for decades and wanted to share some words of wisdom with people who may be stressed about the current housing market.

“Things will get better,” he said. “Just like gas was so high here a few months ago, it’s cheaper than what it was a year ago, so we can’t panic. It’s tough for families for to not be able to do what they want and be strapped with home expenses and everything this time of year particularly. But I hope and pray things are gonna change, and I think they will.”

With his mortgage paid off, Diehl is not planning on moving anytime soon, but if you are wanting to buy a new home in the New Year, DeMond said it is still a good time for sellers and buyers.

“I would say still buy, but stay conservative,” she said. “Hope that the rate goes down, so that you can refinance in the future.”