If you haven't already heard the news, interest rates are on the rise. The Fed promised, and they delivered in their meeting this week.
The Federal Reserve Meeting
At their most recent meeting, the Fed moved policy rates up by 0.5%, just as they've been saying. Because it was expected, interest rates had moved in advance, including those for home mortgage loans.
What's Next With Rates?
It's expected the Fed will continue moving rates on an upward path at each successive meeting of the Open Market Committee, so long as conditions warrant. Most analysts anticipate the increases will continue until the Fed has met its directive of containing inflationary forces in the economy.
Background On The Fed
The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.
The rate was lowered to near zero in March 2020 in response to the pandemic. These historic measures are now being reversed.
This is the second increase this year.
What Does This Mean for Homeowners and Homebuyers?
If you are planning a home purchase or any type of refinancing, including accessing cash from your home’s equity, it may pay to act before further increases. You may want to explore alternatives, such as a lower rate, hybrid adjustable mortgage (ARM) or home equity line of credit (HELOC).
The Greenway Team monitors interest rates and the markets every day. Please feel free to reach out to one of our expert Loan Officers if you have any questions! Out team is happy to help.