Fed Raises Rates at march Meeting; Signals More to Come

by Isaac Benmergui, Esq on April 18, 2017

 Fed Raises Rates at march Meeting; Signals More to ComeThe Federal Reserve finally decided to raise interest rates, just the third time they have done so since the housing collapse in 2008.

On March 15, the Fed voted 9 to 1 to raise a key interest rate one-quarter point to 1 percent. They said the market could expect two more increases before 2017 is over as the inflation rate inches closer to the target rate of 2 percent.

Homebuilders and real estate agents are hopeful that the raise in rates could get some potential homeowners off the fence and ready to sell, as well as buyers ready to commit. Inventory has risen, especially in the luxury markets, since last November as a result of uncertainty about both the election and the economy. Although it won’t create a substantial added cost in terms of home buying, higher rates do create a sense of urgency.

The rate hikes will hit credit-card holders and individuals with home-equity credit lines within about 60 days. Although the Fed doesn’t directly set mortgage rates, they do tend to move with the 10-year Treasury note. Just before the Fed increase, the average rate for the 30-year-fixed rate was at 4.21, up from 3.68 at the same time in 2016.

With home prices close to all-time highs and inventory short, some homebuyers are turning to alternative mortgage products like adjustable-rate mortgages in order to buy. Mortgages rates have climbed a half-point since the 2016 elections.

The next rate hike is estimated to hit in June, with the last one most likely in December.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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