Mortgage Loan Rates may Rise
Mortgage Rates May Rise – if Inflation risk Increases
By Nancy Woodward
According to Charles Plosser, President of the Federal Reserve Bank of Philadelphia, the Federal Reserve may need to raise the benchmark interest rate as recent stronger US economic growth increases the risk of more than moderate inflation.
Mr. Plosser discussed the growth prospects in a speech to the Greater Philadelphia Chamber of Commerce. He feels we may not see stability without an increase in the rate to avoid inflation.
The Fed has not changed the benchmark interest rate which stands at 5.25 percent. This is the fifth straight meeting they where there has not been an increase. The benchmark rate affects the rates which bank charges for loans to individuals and business customers.
The Fed is concerned over inflation. Possner thinks it is possible that moderate inflation will continue although he is concerned over the 3.5 percent annual pace the economy expanded in the last quarter.
Greater growth than expected fuels the fear of inflation when the economy is strengthening. Let’s hope the fears are unfounded. Rising inflation affects all of us, particularly the Real Estate – Home Loan Market.
If you are in the market to buy Real Estate, you should keep an eye on this. You will win on the value of the home you buy now, but you can offset that win with a greater than expected interest rate.
By Nancy Woodward
According to Charles Plosser, President of the Federal Reserve Bank of Philadelphia, the Federal Reserve may need to raise the benchmark interest rate as recent stronger US economic growth increases the risk of more than moderate inflation.
Mr. Plosser discussed the growth prospects in a speech to the Greater Philadelphia Chamber of Commerce. He feels we may not see stability without an increase in the rate to avoid inflation.
The Fed has not changed the benchmark interest rate which stands at 5.25 percent. This is the fifth straight meeting they where there has not been an increase. The benchmark rate affects the rates which bank charges for loans to individuals and business customers.
The Fed is concerned over inflation. Possner thinks it is possible that moderate inflation will continue although he is concerned over the 3.5 percent annual pace the economy expanded in the last quarter.
Greater growth than expected fuels the fear of inflation when the economy is strengthening. Let’s hope the fears are unfounded. Rising inflation affects all of us, particularly the Real Estate – Home Loan Market.
If you are in the market to buy Real Estate, you should keep an eye on this. You will win on the value of the home you buy now, but you can offset that win with a greater than expected interest rate.
Labels: real estate investing advice
posted by Nan at 1:44 PM
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