01/31/2023
MORTGAGE INTEREST RATES? ARE THEY GOING UP?
The Federal Reserve is meeting today 1/31 through tomorrow 2/1. One item they will consider is to whether the Federal Reserve Rate will be raised.
Do you know how many times did the Fed raised the federal reserve rates in 2022?
The Fed raised interest rates seven times last year! The pandemic’s shutdown of the economy had kept rates near zero prior to the Fed increasing rates by 0.25 percentage point in March. That was the first hike in more than three years.
The second increase came in May, this time by 0.50 percentage points, followed by 0.75 percentage point bumps in June, July, September and November, pushing the Fed's key rate to a range of 3.75% to 4.00%.
The latest increase of half a point came in December, bringing the current range to 4.25% to 4.5%.
WHAT DOES ALL OF THIS MEAN? While the Federal Reserve does not set mortgage rates, it certainly affects them.
When the Fed makes it more expensive for banks to borrow by targeting a higher federal funds rate, the banks in turn pass on the higher costs to their customers. Interest rates on consumer borrowing, including mortgage rates, tend to go up. And as short-term interest rates go up, long-term interest rates typically also rise.
Stay tuned for more on mortgage interest rates....
