The Federal Reserve (Fed) made an important decision on Wednesday that is likely to have a significant impact on the mortgage industry. The Fed decided to raise the federal funds rate by 25 basis points, pushing it up to the 5.25 to 5.5% range, its highest level in 22 years.
The increase in the federal funds rate will have direct consequences for the mortgage industry, as it could convince lenders to increase their mortgage interest rates, potentially lowering the amount they are offering to loan out to borrowers. This could make it more difficult for potential borrowers to obtain a loan, as the cost of taking out a mortgage to purchase a home could be too expensive for many.
The key elements of the Fed’s decision are:
• Increase of federal funds rate: The Fed increased the federal funds rate by 25 basis points, pushing it to a 22-year high.
• Impact on the mortgage industry: The rate hike could lead lenders to raise their mortgage interest rates, making it more costly for potential borrowers to obtain a loan.
• Consequences for borrowers: The increased rates could lead to potential borrowers having to take out a smaller loan, making it harder for them to purchase a home.
You can read this full article at: https://www.housingwire.com/articles/fed-hikes-rates-amid-general-wave-of-optimism/(subscription required)
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