Fed Chair Janet Yellen acknowledged recently that “improving energy prices, more moderated dollar strength and a thriving labor market all suggest interest rates should be raised sooner rather than later.”
But timing a rate hike is hardly an easy task. As one economist noted, “This is a particularly tough one to do, because they could get it wrong either way. You get it right, and everyone ignores you. You get it wrong, and everybody blames you.”
Getting interest rates “right” would allow the economy to continue to grow, but would likely go unnoticed by everyday consumers. Getting it wrong, in a worst-case scenario, could restrict consumer spending and ultimately plunge the economy into another recession.
Bottom line for homebuyers? Even if a rate hike does take place, it’s not likely to send mortgage rates soaring. It’s likely the Fed will go with small increases to test the waters, so the affect on mortgage rates should be negligible. However, experts say that the expected long-term trend is for mortgage rates to begin going up, and keep going up. And since housing starts are up 27% since June 2014 – it looks like buyers aren’t wasting any time; they are ready to buy – before rates go up!
If you’re interested in becoming a homeowner, visit simmsdev.com and see which community fits your needs best. Our new urban townhome communities in downtown Dayton are perfect for first-time buyers and downsizers. Whatever your lifestyle, we have the home to match!
Simms Development builds new urban townhomes in downtown Dayton and other surrounding areas including Centerville and Springboro, OH. Please visit www.simmsdev.com for more information.
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