Charleston Homes

07/22/2022

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06/28/2018

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06/27/2018

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12/24/2016

The Federal Reserve voted to raise the benchmark Federal Funds rates .25% December 14 2016 which triggered the 30 year mortgage rate to nudge up a little more to just over 4% now. They also announced that they anticipate 3 more rate increases in 2017 instead of the 2 they had previously announced (likely .25% each increase).

The higher Federal Funds rate makes it more expensive for banks to borrow money, which often leads to higher rates on credit cards and home loans.

What this equates to this year is going from around 3.4% in July (the lowest rate) of this year on a 30 year mortgage to 4.15% in December.

The times of super-low interest rates is coming to an end in the near future.

The housing supply is still pretty low compared to demand which keeps upward pressure on prices and rents.

For the home buyer the combination of higher rates and higher home prices reduces purchasing power. Those most affected are usually marginal buyers and buyers of higher priced properties.

What we will likely see as rates move higher, this may trigger the return of more adjustable rate mortgages. And so the cycle returns...

10/25/2016