Economists Say Rate Hike To Have Little Effect On 2017 Housing

Dated: December 16 2016

Views: 317

Now that the Federal Open Market Committee has voted to raise the target range for the federal funds rate from 0.5% to 0.75%, HousingWire staffer Kelsey Ramirez explores how it will effect first-time home buyers?


Rising rates combined with rising home prices could discourage homeowners from upgrading to a larger home, which would leave little inventory for first-time buyers.


But many economists say that isn't likely, according to Ramirez, as the increase is not enough to cause a significant impact on housing demand. Those economists remain positive about 2017’s housing market.


“The era of ultra-low interest rates is over,” said Lawrence Yun, National Association of Realtors chief economist. “Today’s short-term rate hike will be followed by several additional rounds of increases in 2017 and 2018.”


“Despite these moves, mortgage rates will not rise alarmingly,” Yun said. “By this time next year, expect the 30-year fixed rate to likely be in the 4.5% to 5% range.”


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By Builderonline.com

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Mark Ross

For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....

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