What should you do about interest rates knowing that they’re on the rise? Tom Ross from Bay Equity is here to explain.
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I’m here today with my preferred lender, Tom Ross from Bay Equity, to discuss a question about interest rates: “What should you do about interest rates, knowing that they’re on the rise?”
Tom’s short answer is: Lock your rate in now.
People have it in their head that if they just wait long enough, they’ll end up with a lower rate eventually. But rates in the 3% area are long gone; at our highest this year, we’ve brushed 5% and came back down into the high fours. This time next year, the 4% rates will be long gone as well.
Those in the market need to wrap their heads around the fact that this climb in rates we’re going into will be long-term and sustained. We’re in the midst of a sort of trade war with China, and inflation tends to raise interest rates as well. In fact, the Federal Reserve has gone on record to say that they’re going to raise the federal funds rate at least four times between now and the end of next year. Two of those jumps might occur even before the end of this year.
Now the federal funds rate doesn’t directly impact mortgage rates, but as it rises, you tend to see interest rates come up.
If you have any questions for Tom about rising interest rates, you can reach him at Bay Equity by calling (602) 791-5861 or by sending an email to email@example.com.
For any questions about real estate in general, we always encourage you to reach out to us here at RE/MAX Excalibur. We’d love to answer your questions.