The Federal Reserve voted last week to raise the key interest rate one-quarter percentage point, making it the second of three hikes slated for this year. The outcome was predicted, even with lagging inflation.
“In view of realized and expected labor market conditions and inflation, the [Federal Open Market] Committee decided to raise the target range for the federal funds rate to 1 to 1-1/4 percent,” according to a statement by the Fed. “The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.”
The key rate, though not directly tied to mortgage rates, exerts influence in housing and eventually impacts mortgage rates. The Fed initiated its first increase late last year, voting to carry out the first and only hike of the year, while signaling three hikes in 2017, in December. The Fed made good its promise in March, 2017. Mortgage rates have remained in flux since then, dipping back below 4 % in April for the first time since the presidential election, although the most recent 30-year fixed rate mortgage averaged 3.69% versus 3.60% last year.
It seems to me that the FED will continue its plan to hike rates again later in the year and it will trickle down to the consumer in higher credit card rates and mortgage rates. The prudent scenario if you are planning a home purchase is to make you decision sooner rather than later.
Give us a call, 631 765 5333, visit our office, or email me, marie@BeninatiAssociates.com. We’ll help you find the right home for your needs. No high pressure selling, no gimmicks, no nonsense, just plain old hard work and looking out for you, our clients and customers.
Source: RIS Media.