This year is proving to be quite an unpredictable year in the financial markets. In December, the Federal Reserve announced the first Fed interest rate hike, predicting four additional hikes in 2016.
Many homeowners wonder what this will do to their mortgage rate, especially for homeowners that have ARM loans, where the interest rate is fluid. We busted myths about the correlation between the Fed interest rate and home mortgage rates.
While home building may slow in areas when the Fed rate is hiked more, home loans should remain fairly stable.
However, the Fed will spend the year negotiating conflicting reports between positive U.S. job statistics and poor global economic data, some reporting that this will delay the Fed’s rate hike plans.
With all of the market volatility happening in January 2016, homeowners may be concerned about what this means for home prices.
Currently, home prices have remained steady, and the spring market will be robust with new homeowners looking for a new home. Factors include more people moving into jobs, relocation, and millennials moving out of their parent’s homes.
In addition, rent prices have increased dramatically, and it is still a good time for purchasing a home or refinancing into a lower home loan.
Our recommendation: focus on putting your monthly budget, credit, and finances in order for your next home move. Remain steady and don’t let the buzz around the Fed rate hikes impact your short-term strategy.
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