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Worrying About Interest Rates…

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There is speculation that the Federal Reserve could raise interest rates in June then gradually increase thereafter, however, the impact of low oil prices, a strong dollar and the unemployment rate over the next two months, will be a determinant factor. Some critics voiced that to increase interest rates at this time would be premature, rather wait until 2016 to allow the economy to strengthen.

This would be the first increase in nearly a decade; in 2008 the Feds cut interest rates to historically low rates that lingered near zero for approximately six years, to help boost the economy after the housing bubble collapsed. The increase will have an effect on mortgages and auto loans, albeit minimally, according to Jed Smith, an Economist for National Association of REALTORS®, so there’s not much to do about it, except to shop for the best mortgage rates you can find. And keep in mind that the likelihood of interest rates increasing in June is speculative.

Source: “Fed officials say June rate hike still in play, hinges on data,” Reuters (April 9, 2015). “Using NAR Research to Address Prospective Buyer Concerns ‘I’m Worried About Mortgage Rates’” National Association of REALTORS® Economists’ Outlook (April 8, 2015).

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