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…
Slow and Competitive Market Conditions Likely to Continue in Virginia
By Virginia REALTORS® - September 29, 2023
According to the August 2023 Virginia Home Sales Report, there were 9,456 sales in Virginia’s housing market. This is 2,237 fewer sales than last August, reflecting a 19.1%… Read More
Is Rent Still a Cost Burden to People Living in the U.S.?
By Abel Opoku-Adjei - September 13, 2023
The cost of living in the United States has been growing at a rate that many people struggle to keep up with, especially regarding rent. What is causing… Read More
Mortgage Rate Lock-in Effect in Virginia
By Virginia REALTORS® - September 12, 2023
Most recent articles about the housing market discuss the “mortgage rate lock-in effect.” But what does mortgage rate lock-in mean, really? In the period of low interest rates… Read More