Are you paying attention to what’s going on with the Fed?
Some big changes are coming soon, and it could affect you if you’re planning to buy or refinance a home. This is why we LOVE being a broker: we get to give our clients the latest news so they can make the very best decisions and get the most favorable mortgage interest rates possible.
If you’ve been paying attention, you know that interest rates have been historically low for a while now. In an effort to boost economic recovery during the COVID-19 pandemic, the Federal Reserve has kept the benchmark interest rate near 0 percent since this crisis began. Now, amid concerns about inflation, interest rates are about to go up.
In December, Fed president, Jerome Powell, announced that the central bank is considering up to seven rate hikes by 2024. As many as three of these jumps could happen in 2022 alone. In fact, the first elevation of the federal funds interest rate could happen as early as March. Rising interest rates can mean a slowing of inflation because of a slowdown of business activity. What’s more, the money people earn by saving and investing is going to go up with the interest rate.
IF YOU’RE PLANNING ON TAKING OUT A HOME LOAN, THOUGH, IT’S BEST TO JUMP IN BEFORE THE INTEREST RATES GO UP.
While the benchmark rate has been hovering near zero, mortgage interest has also stayed low. 30 year fixed mortgage rates hit an average low of 2.65% last January, and 15 year fixed mortgage rates went as low as 2.10% last July. Those 15 year rates have stayed low, bouncing between 2.3% and 2.4% since last September, while 30 year rates have already started to climb and are currently hovering at or above 3%. That’s still an excellent rate, but rates are inevitably going to rise.
This means that whether you’re a first time home buyer or looking to refinance your mortgage, now is the time to do it. While experts are divided on how effective the Fed’s new policies will be at fighting inflation and boosting economic recovery, they agree that mortgage rates are going to begin to rise significantly in the near future. It’s estimated that the average 30 year mortgage rate will hit 4% this year and climb to 4.3% within the next two years.
If you’re ready to take advantage of current low rates and get ahead of the Federal Reserve’s rate hikes, First Coast Mortgage Funding would love to be your broker. At First Coast Mortgage Funding, we offer creative solutions to help borrowers improve credit and overcome roadblocks during the home buying process. Committed to helping people in the First Coast region buy and refinance residential properties, we specialize in every kind of property, working to provide home loans to our clients at the lowest interest rates, with the best possible service. Contact us through our website or call 904.770.5000 to talk to a financing expert.