This week, the Federal Reserve raised the benchmark interest rate a quarter of a percent, a decision that will ultimately affect a number of consumer debt vehicles including car loans, credit card rates, small business loans, and of course, mortgages.

Why Raise Rates?

In response to the 2008 financial crisis, the Fed lowered its target rate, or the rate that banks charge each other to borrow money, to nearly zero. This was meant to encourage lending and stimulate the weakened economy. Now that the economy has improved over the last several years, the Fed is now steadily raising the rates to moderate growth and curb the threat of inflation.

What Does That Mean For Homes and Mortgages?

Prior to the official Fed meeting, the market was aware that the current state of the economy would almost certainly lead to a rate hike. Therefore, the rate was already baked into current markets, so homebuyers will not see any surprises in their rates.

However, rates will only continue to rise in the coming months and years. A word of advice: those who are on the fence about purchasing should make their decision quickly. Rates are still at historic lows, but they may not be for long.

Please call 321.265.4000 with any questions or to get started on your loan application today.