Last week the Federal Reserve raised the benchmark interest rate for the second time in the past few months. While the Fed raising this rate ultimately shows that the American economy is healthy and growing, it puts pressure on buyers who fear the increase, and perhaps further increases. While interest rates rise, it is expected that incomes rise with it, as a result of the booming economy. But for those of us who are locked into our jobs and not seeing a raise in the future, we are left pondering how we are to benefit.
So how do these rising rates affect buying your Los Angeles modern home?
In order to boost sales in the housing market after 2008, interest rates were brought to record lows to incite people to buy. As a result, many of this generation’s homeowners only learned of a housing market with historically low interest rates. But, the reality is that that was abnormal, and now things are changing. How much will they change though? The truth is, no one knows for sure. Economic forces are complicated and multidimensional. There’s no way of saying if interest rates will go up even higher.
The Good News & Why It’s Time to Buy Now
For now, data is showing that this last hike of the rates from a range of 0.5 percent to 0.75 percent did not affect 15-year and 30-year fixed mortgage rate loans. But, it is not clear whether that statistic will remain. Also, the Fed’s benchmark rates still could go up further, and if they do, and you’re considering buying, right now would be the time to pull the trigger and buy that Los Angeles modern home, before interest rates go up again.
By: David Plick