Various experts have been making consistent predictions of impending interest rate hikes. Since the end of 2015, the Fed has raised interest rates .25% three different times, once in 2016 and twice already in 2017. Even with the .75% cumulative increase, the 1.25% rate is still at historic lows with the 10-year Treasury Notes also remaining at extremely low rates.
Fed Fund and 10-year Treasury rates – 60 year history
So when will rates, including mortgages, start moving toward long-term rate levels?
Current signs from the Fed would indicate one more increase this year (.25%) with several anticipated in 2018. What is obvious is that there is no plan to see either rapid increases or more aggressive single increases anytime soon. Concern about the economy, both domestic and international, has kept caution at the forefront of Fed decision making.
What does this mean for home purchasing?
You should expect a slow rise in interest rates, with rates still at low levels throughout 2018. This will keep home payments “affordable” with modest rises in home prices.
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