Mortgage rates rose this week as the Federal Reserve signaled an upcoming hike in interest rates. On Wednesday, the Fed held a press conference to provide an update on the economic status of the US, and it surprised investors with their openness about the possibility of aggressive rate hikes in the near future. This shift in stance resulted in a slight increase in mortgage rates, which have generally been quite low in 2018.
This small increase in mortgage rates can lead to larger changes in the borrower’s loan repayment. Homebuyers, who may have been able to afford a certain loan amount prior to the rate increase, could see a potential decrease in the amount they are able to borrow due to the higher interest costs. This in turn can impact their ability to purchase the home of their dreams.
Even with the rate increase, mortgage rates remain near historic lows. Homebuyers who were previously on the fence can still benefit from the conditions of today’s market and take a chance on home ownership. Buyers who are considering such a jump, however, should carefully consider the range of rates they can be offered and research available loan programs, as this can drastically change their situation.
In the short term, it is unclear whether or not mortgage rates will further increase due to the Fed’s announcement. As a result, those who are wishing to purchase a home should act soon and explore their best options. By doing this, they can take advantage of the low rates that are still available before any further increases are implemented.
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