The Federal Reserve Raises Rates for the Third Time in 2018
As anticipated, the Fed increased interest rates by 25 basis points on Wednesday. The hike, which is the eighth increase in the past two years, supports the Fed’s confidence in the economy. Unemployment is low, economic growth is strong, and inflation is relatively stable.
The Fed anticipates a fourth rate hike in December, with a majority in favor of such a move. In 2019, Fed officials expect at least three rate hikes, and one more in 2020. While rising rates affect most everyone from homebuyers to investors, keep in mind we are in an era of unprecedented monetary policy.
“Mortgage rates were unnaturally low for a long time, so these increases are no reason to panic,” states Mike Dulla, president of United Home Loans. “Considering rates averaged 8% in a healthy 1990s economy, borrowers are still, and should remain, in a great position to buy a home.”
If you’re in an ARM or considering a refinance, however, now may be the best time to act. You can lock-in a rate below 5%, which is especially attractive for a cash-out refinance.
If you’d like to evaluate your current mortgage before rates continue to climb, please contact us below or at 708-531-8388.