Attorneys At Law

Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

Attorneys At Law - Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

Federal Reserve to Keep Interest Rates Steady

If you are planning on buying a home in the near future, there is good news for you from the Federal Reserve about interest rates.

The Federal Open Market Committee unanimously voted to maintain the federal funds rate at a range of 1.75-2 percent.

 

Here is the original story as published by The Federal Savings Bank:

Fed holds benchmark interest rate steady for now

August 2018

The Federal Open Market Committee wrapped up its fifth meeting of 2018 with a unanimous vote to maintain the federal funds rate at a range of 1.75-2 percent, according to the group’s statement.

Home for saleThough rates will remain the same, the Fed also alluded to a strong national economic climate, which will likely result in future rate hikes later this year.

With only three meetings left in 2018 – Sept. 25-26, Nov. 7-8 and Dec. 18-19 – it’s not hard to narrow down when those increases might happen. The New York Times reported that the paper expects them to occur in September’s and December’s meetings.

 

Why the Fed raises rates

The Federal Reserve typically decides to increase interest rates during times of economic growth. But just because FOMC members voted to maintain the current rate doesn’t mean they’re not optimistic about current conditions.

First Time Home Buyer Mortgage WorkshopIn fact, the statement issued after the meeting pointed to job gains and household spending as indications of strength.

In the most recent Employment Situation, the Bureau of Labor Statistics reported an increase in nonfarm payroll employment of 213,000 in June. Wages also increased, with the average pay increasing 5 cents to $26.98 per hour.

Personal consumption expenditures – another way of saying consumer spending – increased 0.4 percent in June, according to the most recent release from the Bureau of Economic Analysis.

The increased spending was primarily focused on accommodations and restaurants, a sign of strong consumer confidence.

Because of these positive signals, many economists are confident that there will be two rate hikes before the end of the year.

 

How consumers can prepare for increased rates

Though there’s no rate hike to respond to this month, consumers can take steps to prepare for any increases that might occur in the coming months.

Model Home TaxAlthough a rate hike likely won’t have an immediate effect on most consumers’ day-to-day financial lives, they can see gradual changes in interest rates and other costs over time.

Rate changes could lead to higher credit card interest rates. As such, consumers who are carrying a balance now might begin to strategize a plan to pay down their debt.

Mortgage interest rates may also begin to escalate. So far in 2018, rates have grown from an average of 3.95 percent for a 30-year fixed-rate mortgage at the beginning of January to 4.54 percent for the same product during the week ending July 26, according to Freddie Mac’s Primary Mortgage Market Summary.

For prospective homebuyers hoping to close on a purchase this year, it may be smart to get preapproved soon.

This story was originally published by The Federal Savings Bank

 


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The Law Offices of Lora Fausett P.C. provides real estate law services including loan modificationsbuying and selling legal assistanceshort sales and deeds in lieumortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPageCookKane, Will, and Kendall Counties.

For Information Call 630-858-0090