Fed Rate Hike: What it Means for Mortgage Rates

Filed under: Market Comentary

It’s that time again. Today is the 2nd day of the Fed meeting; it’s the first meeting with Jay Powell as our new Fed Reserve chairman. Every time there is a meeting, I talk about this topic. This month is no different from what we have discussed in the past.

The interest rate that we always hear in the news that is being changed doesn’t have a direct impact on our mortgage rates. While it doesn’t directly change mortgage rates, it is a big data point that absolutely can have an indirect effect on interest rates.

Fed Funds Rate Increase

We are expected to see a .25% increase in the Fed Funds Rate. But, this increase won’t have an automatic increase in mortgage rates by a quarter of a point. That being said, it is a big economic data point. This month, it is even bigger because we have a new Fed chairman. It is something that needs to be watched… what does he say about the increase? If he starts to sound bullish, then it could be an indication that we need to keep a close eye on the upcoming changes.

I’ll keep you updated when more information is available. In general, rates haven’t been favorable for several months now. So, our team is looking for ways to help customers get the best rates that are available. I say that rates aren’t favorable, but keep in mind that it is all about perspective: we are working off historic lows, but we are still in really great territory for the real estate market.

Are you thinking about buying a house, but you are freaking out about your interest rate? I would love to talk to you about options that are available. Call Franklin Loan Center for more information. You can contact me anytime if you have questions about the trends in the industry.

Also, I would appreciate if you would like or share this video if you found the information useful. Thanks!

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