Federal Reserve takes a pass on rate hikes…for now.
Unless you’re able to pay all cash for the next home you buy, you’re going to need to know a few things about interest rates. Buyers have been extremely lucky the past few years as rates have continued to hover around historical lows.
And yet, some “on the fence” types are still waiting for some sort of magic moment or sign to finally take that step toward purchasing a home.
Well, consider this your sign: The Federal Reserve has decided once again to hold off on increasing interest rates, at least for the time being.
In a two day conference last week, “The Fed’s” big players, including Chairperson Janet Yellen, met to determine whether it’s finally the appropriate time to raise the base interest rate at which banks and lending institutions borrow money. This rate also determines the “retail” rate that consumers pay. The conference concluded with a decision not to raise rates, with the caveat that they may reconsider as early as December of this year, or as late as March 2016.
Why would they raise rates anyway?
The Fed has kept rates low in an effort to maintain and bolster home sales and other products that require credit. This was deemed critical at the outset of the recession when, in 2008, the “domino effect” of bad loans and other economic factors put the US in one of the worst financial positions since the Great Depression of the 1930’s.
As our economy has continued to recover and grow since, the Fed has considered raising rates in an effort to curb inflation. Of course, the problem with that is that inflation really hasn’t taken a strong hold on our economy, despite its growth in the past 8 years. Rather than risk offsetting what is still a brisk real estate market, they took a pass on raising rates.
So what are you waiting for?
If you’re one of those “on the fencer’s”, consider this your lucky sign. Take the opportunity to find out what it takes to qualify for a loan at the best possible rate by contacting us for a no obligation consultation.