Fed Increases Interest Rates for the Third Time This Year
December 13, 2017
One the eve of 2018, Federal Reserve Chairwoman Janet Yellen has announced the third boost in interest rates of 2017. This increase will fall between 1.25 percent and 1.50 percent, and many are viewing the hike as a show of confidence in the U.S. economy. It is predicted that there will be three to four adjustments down the road in in 2018.
Lawrence Yun, Chief Economist for the National Association of REALTORS®, noted that this move will raise mortgage rates, including the 30-year fixed mortgage rate, in 2018. The current rate of 3.9 percent could see an increase of 25 basis points.
According to Yun, “It remains to be seen whether the effects are long-lasting or just for a short period of time. However, with the unemployment rate already at a low of around 4 percent, there is not much room to go further down. That means inflationary pressure will slowly develop. That is why the Federal Reserve today raised the short-term interest rates and will likely do so three more times in 2018… Economic stimulus will help with job creation and housing demand, but higher interest rates threaten to cut into housing affordability in 2018.”
You might also like…
Housing Market March Madness: How do Virginia’s College Towns Compare?
By Abel Opoku-Adjei - March 30, 2023
It’s March Madness, one of America’s most entertaining post-season tournaments! This year’s NCAA March Madness has been entirely unpredictable. There were zero perfect bracket predictions across the country… Read More
Virginia Home Prices Climb Despite Slowing Sales
By Robin Spensieri - March 22, 2023
According to the February 2023 Virginia Home Sales Report released by Virginia REALTORS®, there were 6,505 home sales across Virginia in February. This is a 20.3% reduction compared to February… Read More
Collapse of Silicon Valley Bank and Signature Bank: What Happened and How It Impacts Your Business
By Virginia REALTORS® - March 17, 2023
By: Chief Economist Ryan Price & Deputy Chief Economist Sejal Naik Virginia REALTORS® is taking a look at the recent bank failures making headlines across the nation AND… Read More