What Does the Fed Rate Hike Mean For Housing?
You probably know the Federal Reserve raised rates last week. But what does this mean to you if you are looking to buy a home in the near future?
Many in the housing industry predicted the Federal Open Market Committee (FOMC), the policy-making arm of the Federal Reserve, would vote to raise the federal fund’s target rate at the December meeting. There were several factors that contributed to the 0.25 point increase (from 0.50 to 0.75), but many are pointing to the latest jobs report and low unemployment rate (4.6%) as the primary reason.
Tim Manni, Mortgage Expert at Nerd Wallet, said:
“Homebuyers shouldn’t be particularly concerned with [last week’s] Fed move. Even with rates hovering over 4 percent, they’re still historically low. Most market observers are expecting a gradual rise in home loan rates in the near term, anticipating mortgage rates to stay under 5 percent through 2017.”
Real Estate Bottom Line
Interest rates are still at historic lows. Don’t miss the opportunity to own your dream home!