Mortgage Rates To Continue to Go Up
On December 14, 2016, Fed raised the interest rates by .25 percent. Since the election and until the Fed meeting on Dec. 14th mortgage rates went up by 0.5 percent. This has already made a big impact on affordability of housing. Mortgage in the amount of 300K is now almost $90 more expensive, every month. Rates are to continue to go up and there is not much we can do about it. The fact is, we still have historically low interest rates. If you already own a home and have a fixed mortgage you will not be affected, however if you have a second loan on your home; an equity line of credit, your payment next year will change a result of Fed's decision from December 14th. According to Fed, HELOC (home equity line of credit) rates will rise yet three times in 2017.
What does this mean for future homebuyers?
If you have already been preapproved by the lender, now will be a good time to get in touch with your lender and see where you stand, especially if the price of your future home was already a bit of a stretch. At this point you may no longer qualify for that home. On the other hand, if the rates continue to go up, we may start seeing a small reduction in prices in some markets.