Fed Raises Rates .25 Basis Points – What Does It Mean To You

Fed Raises Rates .25 Basis Points – As Realtors, one of our jobs is to educate our clients, and that means sometimes discussing the boring side of real estate. Last week the Fed Raises Rates .25 Basis Points – what does it means to you?

 

 

First, let’s understand what 0.25 basis points means – that is a quarter of 1%. Not a lot, right? Right.

 

A 0.25 basis point move is not enough to significantly change interest rates. Could they move? Sure. Should they move? Yes. We have a whole generation that thinks 3 percent is normal, and it’s just not. The Fed has not raised rates for something like 8 years because of the large downturn in the economy.

 

The rate which they had loaned money at had been stuck at zero, and that is not good. Our savings rates in banks needs to be higher for a healthy economy, so the news is actually positive.

 

So who should panicked or concerned about the rate changes?

 

Here are the two important people who should be making moves now:

 

Buyers – Thinking of buying a home soon? Perhaps you have been on the fence with a purchase decision because you think prices might come down soon? The common consensus right now is that prices will continue to go up slightly over 2016. That is not the news you want to hear because the Fed is also planning on raising rates again in 2016. My suggestion? Find a home that fits most of what you need and get on it! Rates at or below 4% will quickly become a ting of the past.

 

Owners – it is time to refinance if you haven’t already. As I said, these rates at or below 4% won’t be with us much longer. Locking in now for the long haul is a best bet, especially for those who are on adjustable interest rate products.

 

Don’t panic! Fed Raises Rates .25 Basis Points – A lot of what you hear from CNBC or other financial outlets will sound like the sky is falling, and that is simply not the case. Rates are still around 4% for a 30 year fixed mortgage, which is terrific.

 

Need help or advice about a situation? I would love to help answer your questions or help with a situation. Call, text me or email me for help!

 

Colin: (714) 743-9882