The Fed raised benchmark interest rates this week by 0.25%. “There’s no need as a renter or home buyer to panic today,” said Gerard DiRuggiero, Principal Broker of UrbanLand Company. “The Fed has raised their prime rate to 0.25% today in its 2nd increase in 10 years due to an improved US economy. We’ll see how the mortgage industry responds and if they raise loan interest rates right away in response. ”
We’ve been discussing interest rates in the ULC Blog all year and aren’t going into too much detail on why rates are raising. Make sure you understand that the prime interest rate is a different number than the interest rates at your bank, credit card and (future) mortgage lender. The raise in prime rate has the following basic effects.
Further rate increases are planned in 2017 by the Fed. There will be 2 to 3 more interest rate increases next year, if the Fed follows their own predictions. “Mortgage interest rate increases can happen weekly, while the Fed only meets several times a year. If you’re a renter and want to stop renting, now’s a great time to start the home or condo buying process,” said Gerard DiRuggiero, Principal Broker of UrbanLand Company.
Again, don’t panic. The rate increase is not the end of world. “The best way to approach this news is to get educated on becoming a homeowner quickly,” said DiRuggiero. “That’s what we are here for. We run free Home Buyer Workshop twice per week that are very accessible to those who want to learn the fast path to ownership. Plus, we’re expert in local $0 down and other low down payment options.”
Here’s some of the homes and condos our Workshop Attendees have successfully purchased this year!