The Feds Say Goodbye – Rising Rates Say Hello?

Federal_Reserve_Building_The Federal Reserve has finally decided to fold up their QE (Quantitative Easing) Tent and ride off into the sunset.

What does that mean for mortgage interest rates? They’re going up.

How far and how fast depends upon the economist or financial analyst you’re listening to.

The good news is they’re holding onto their gigantic ($4.5 Billion) portfolio of Treasuries and Mortgage Backed Securities (MBS) which will slow the speed at which mortgage interest rates increase but the unanimous conclusion amongst economists is that they will rise.

Why will they rise? Because the Federal Reserve has been spending as much as $85 Billion a month over the past few years to buy Treasury Notes and MBS to keep mortgage rates artificially low with the hope of stimulating home sales and the economy.

What will this mean for home buyers and sellers? If you’re a buyer rising interest rates means less home for your money and if you’re a seller it means fewer potential buyers for your home.

Whether you’re thinking of buying or selling don’t wait. Interest rates are going to rise it’s just a matter of how much and how fast.

As always my consultations are free and without obligation. Call me, 602-793-1627, as an informed buyer or seller you’ll make better decisions.