Interest Rates Not Going Up Just Yet

Dated: September 29 2015

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The Federal Reserve decided not to increase interest rates due to a weak international economy. It is expected however, that they will eventually start raising rates, most likely at the start of next year. The Fed has maintained the rate it charges, for borrowing money, at zero since December of 2008 in order to stimulate the economy, and the housing market. Many are concerned about the effects of a rate hike on the economy and particularly on the Real Estate Market. 

So what can home buyers expect?

As a home buyer, you won’t see a huge change. It is expected that the Fed will increase the rates gradually over the next couple of years in order to avoid shocking the markets. So how gradually are they going to increase rates? About 0.25% per increase. With the average rate at 3.9% the first increase will be marginal. For many, the prospect of buying a home at incredibly low rates will still be a reality when compared with the standard rates. Ten years ago the rate was at 6% and 20 years ago it was at 7.5% This window of opportunity is closing for all of us.If you are a home owner and you purchased your home over 3 years ago, it might be time to look into refinancing if you haven’t done so. If you purchased your home with a rate higher than 4.75% you could save money in the long run. Many banks compete by offering lower rates, but charge high origination fees. So don’t just go with your local bank. Shop around or contact me for a list of preferred lenders.

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Hector del Gaiso

I give each of my clients my personal guarantee that they will be satisfied with my services. Over 70% of my business are referrals from past clients. I am proud to say that those relationships have b....

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