Interest rate increase

Federal Reserve Rate Hikes Likely to Impact Home Mortgage Rates

On March 21st the Federal Reserve FOMC (Federal Open Market Committee) called for the fed funds target rate range to be increased 25 basis points to 1.50%-1.75%. And policymakers are leaning towards two more rate hikes by year end. The Committee now expects a total of six hikes by the end of 2019.

Hikes in the prime interest rate from the Fed, nearly always results in higher interest rates for home buyers. A 1% jump in the interest rate can cost about $23,000 extra on every $100,000 over the life of a thirty-year loan. With two more rate increases considered very likely this year, potential homebuyers will get off the fence and into the market, in order to buy a house before rates go any higher.

Anyone currently contemplating applying for a new loan or a refinance should try to lock in a loan at today’s rate as soon as possible.

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