During its two-day meeting this week, the Federal Reserve decided to keep interest rates steady. But with two more Fed meetings planned in 2015, in October and December, analysts are predicting the rise in rates will happen before the end of the year. This article from Crissinda Ponder of Bankrate provides some advice on how the rise in rates should affect the timing decisions of anyone who’s planning to purchase a home this year or in 2016.
Mortgage rates have been at historically low levels for a while now. The benchmark 30-year fixed-rate mortgage has averaged 4.01% over the past 52 weeks, according to Bankrate data.
That’s likely to change when the Federal Reserve finally decides to raise the federal funds rate, which has been near 0 for close to a decade. The central bank opted not to begin liftoff at the conclusion of this week’s Federal Open Market Committee meeting, but a rate increase is inevitable.
Interest rates on mortgages may move higher before the first increase of the federal funds rate is implemented, which could be at the meeting in December, says Realtor.com chief economist Jonathan Smoke.
“Those planning to get into the housing market in 2016 may want to consider a home purchase before the end of the 2015,” Smoke says.
