I am sure by now you have heard that the Federal Reserve has raised the interest rate by .25%. This is the first increase since June of 2006 and is their first move since the financial crisis. This move shows that the Fed has confidence in the economy and that it will have a positive effect on the economy as a whole.
How will this effect the housing industry? This most likely will have a negative impact on the mortgage side with people who have an adjustable rate mortgage and equity lines of credit. It should however, move many people off the fence who have been considering buying a home, which is good news for both sellers and the housing industry as a whole.
Experts say this will be a slow change and not have an immediate impact. They also expect several more rate hikes in 2016, which will be very gradual so as not to harm the industry or the economy.
A quarter of a percentage point increase in rates adds about $43.00 a month with a $300,000 mortgage and a rate of 3.75%. Hopefully this puts it into perspective regarding the increase. This is a good time to check with your lender about the amount of increase and how this effects your loan payments. Its always smart to discuss these details with your lender and any fluctuations in rates so you know exactly what you will be paying monthly. We have great lenders that we would be happy to refer to you if you have any questions.
Here is a link for more information on the Federal Reserve:
Michelle and Heidi