Posted 5 years 6 days ago ago by SuperUser Account
Although the federal reserve rates don't directly affect mortgage rates, they have a pretty quick indirect impact on mortgage rates and so it makes sense that we monitor and understand what the changes mean when the Federal Reserve either decreases or increases rates.
In it's simplest form the Federal Reserve rate is the cost at which lenders (banks) are able to borrow money in order to make loans to you and I. In most cases this increase or decrease in cost to the lenders is passed on to us in the interest rates that are offered when we borrow money from the lender in the form of a mortgage note. More information can be found at, http://www.bankrate.com/finance/mortgages/federal-funds-rate-mortgage-rates.aspx.
The Federal Reserve is scheduled to meet again on June 14 - 15th at which point decisions will be made on the interest rates. The Federal Reserve calendar can be found here, https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm. The Federal Reserve utilizes a number of different economic factors such as employment growth to determine if it should increase or decrease rates.
For better or worse, speculation is part of the fabric of our society and so up until the Federal Reserve actually makes a decision, we'll see a number of news outlets making their predictions on what the Federal Reserve will do and as a result institutions may begin making changes in preparation.
As it relates to Real Estate we all need some place to live and have to make the decision between renting and buying in addition to determining the best places to put our hard earned dollars to work for us. Borrowing at today's low rates is still palatable and helps to justify the decision to buy vs. rent or to purchase an investment property if you are financially able to.
Do your due diligence, and if you determine that it's in you and your families best interest to buy or sell, give me a call. I look forward to hearing from you.