In December 2016, the Federal Reserve raised its short-term interest rates by 0.25%. Now, at the first few weeks of 2017, many people are wondering if these fed rate hike will affect the current mortgage rates. Is buying a new home this year not ideal?
Last Fed Rate Hike
Before the December 2016 Fed rate hike, the Federal Reserve already set an interest rate increase in December 2015. At that time, many real estate experts expected the rates to go even higher. Instead, it fell by 3.5% in July 2015. But then, the presidential election happened and the rates soared above 4%.
With that significant mortgage rate movement, it looks like the recent Fed rate hike won’t affect the mortgage rates as much as the Trump administration would. According to several economists, President-elect Trump’s possible changes, such as appointing a new Fed chair or cutting taxes, might have an impact on the country’s current mortgage rates. But despite this prediction, experts still expect an improving economy, offsetting the probable rising mortgage rates.
2017 Mortgage Forecast
With a potentially better economy this 2017, economists expect lower unemployment rates, raised wages, and a higher median household income. No wonder a number of real estate experts say that 2017 is still a good year to purchase a new home. They even forecast about three million first-time homebuyers this year. But as always advised by CityCreekMortgage.com and other mortgage planners in the country, would-be homeowners must find the best rates before making a decision.
When combined with higher personal income, the possible rise in mortgage rates would be tolerable. After all, it is still better to be financially ready before buying any properties. As long as you work hard and make smart money decisions this year, a new home for your family is not a far-fetched idea.