The Federal Reserve said in its January 26 monetary policy update that it is getting ready to raise interest rates — but it kept rates near zero for now.
In our own January 3 blog on homeownersfg.com, we reported that the Federal Reserve indicated three potential increases to interest rates in 2022. None have occurred at this time, but the writing is clearly on the wall. Those rate increases are coming, most likely beginning at the Fed’s next meeting in March, two years after the central bank slashed rates to near zero in response to Covid-19. The pandemic continues to drive the Fed’s decisions about interest rates, as do inflation, employment statistics, and other economic factors.
What does this mean for consumers and how should you respond?
In terms of mortgages, now is absolutely the time to move forward with a new home purchase or refinance if either is in your plans for 2022. Higher interest rates can translate into thousands of extra dollars over the life of a loan, a situation you can avoid by locking in a low rate today.
Contact your local Homeowners Licensed Mortgage Professional as soon as possible to get ahead of the game before rates start to rise this year.