So 'the Fed' raised rates...but what does it mean?

The Fed’ raised rates ¼ point today.  What does it mean for real estate?

Not much, fortunately.

First, the market expected a rate increase…this was not a surprise…’the market’ was ready for it.

Second, the rate the Fed controls is an overnight lending rate…think 12 hours, while we mortgage lenders commit for 30 years so the two are relatively unrelated.  The rate on your credit card or HELOC may rise ¼ next month but rates on long term loans like mortgages don’t move in lockstep.  In fact, I wouldn’t be surprised to see lower rates in the next month or so…

Ultimately, an increase in short term rates will hurt the stock market and that will drive money back to bonds.  Also, long term bond buyers care mostly about inflation…if they don’t see inflation, they don’t care what the fed does and they will buy bonds, regardless.  More investors chasing bonds means lower bond/mortgage rates.

If you are on the fence, this may be the last opportunity to take advantage of the low rates before they do up. Contact me today for a free consultation and go over your options to purchase your next home.

Call me at 951-821-6683 or email me at jeff@jeff4homes.com

Jeff Menendez
Keller Williams Realty
Your Real Estate Consultant

Content Provided by

Craig Doty
www.craigdoty.com

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