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On October 9, mortgage interest rates hit their highest levels in over seven years! See below for more detailed info on rates.....
Everybody knows interest rates are on the rise, but when will it end?
While long-term mortgage rates are not directly tied to the rate set by the Federal Reserve, Fed policy is a correlating indicator of what will happen to long-term mortgage rates down the road.
On September 26, the current Fed Funds Rate rose to 2.25%, with a likely increase to 2.5% at the December Fed meeting. The September increase was the eighth quarter-point interest rate increase in the last two years.
Rate hikes and rate drops often occur in bunches, as we’re seeing now. With the economy steaming along and rates still at low levels, it’s likely we’ll see several more increases before the Fed finds a happy medium, at least until other factors come in to play forcing further changes. The Fed ultimately increases rates to keep inflation moderated.
“Inflation is when you pay fifteen dollars for a ten-dollar haircut you used to get for five dollars when you had hair” - Sam Ewing
What Do Rate Changes Mean For You?
We’ve been in a hot real estate market for eight years now. These recent rate increases will continue to impact affordability and put downward pressure on home prices…or at least stabilize them.
Rate increases can also directly affect existing adjustable rate mortgages (ARM). If you have an ARM loan, feel free to contact us and we’ll be happy to discuss your current loan to see if it’s the best fit for your long and short-term goals.