How Will the Fed’s Recent Interest Rate Hike Affect the Housing Market in 2016?

Since 2008, the Federal Reserve has kept a zero interest rate policy in place.  But on Wednesday, December 16, 2015 they voted to increase the benchmark short-term interest rate by 25 basis points.  The Federal Reserve made it clear that they will be issuing a gradual tightening cycle over the coming months.  This likely means mortgage rates will inch slowly upward.

Most economists are predicting that this plan shouldn't unnerve the housing recovery, as the interest rate is still low compared to historical standards.  In fact many economists feel that this uptick could actually stimulate the economy as it provides a signal that the economy is strengthening.

Economists are predicting the Federal Reserve will raise short-term rates approximately four times by the end of 2016.  According to®’s 2016 forecast, the 30-year fixed-rate mortgage will likely average 4.65 percent by the end of next year.  Last week, it averaged 3.93 percent, according to Freddie Mac.  This news may also stimulate the housing market as it is expected to influence “fence sitting” buyers and sellers to act quickly before mortgage interest rates get much higher.

 “If you are thinking of buying, selling, or renting out your home, we'd love to hear from you!  Contact Acuity Group to get started in the right direction!  

Working with experienced professionals will boost your profits!”

What is Your Home Worth?  Schedule Your FREE Home Value Analysis by clicking HERE 

Interested in Buying a Home?  Start Your Customized Home Search HERE

Wondering What the Housing Market Looks Like in Your Neighborhood? Click HERE for a FREE Report!

Acuity Group Real Estate Professionals

564 Dodge Ave Suite A - Elk River MN 55330

Office:  763-633-3535

Click HERE to visit us on Facebook

OUR SPECIALTIES:  Property Management and Residential Rentals, Listing & Buyer Specialists, golf course properties, water front properties, acreage & hobby farms, condos & townhomes, association maintained properties, senior housing, luxury homes, vacation & secondary housing, CDPE (Certified Distressed Property Expert), Short Sale Specialist and REO sales & Investment property

Serving the following Minneapolis Cities & Suburbs: Elk River MN, Zimmerman MN, Big Lake MN, Rogers MN, Otsego MN, St. Michael MN, Albertville MN, Princeton MN, Ramsey MN, Anoka MN, Nowthen MN, Monticello MN, Oak Grove MN, Burns Township MN, Champlin MN, Dayton MN, Hassen Township MN, Coon Rapids MN, Blaine MN, Fridley MN, St. Francis MN, Livonia Township, Andover MN, Becker MN, Baldwin Township, Orrock Township, Plymouth MN, Maple Grove MN, Osseo MN.

Serving the following Minnesota Counties:  Sherburne, Anoka, Wright, Hennepin and portions of Isanti County




Comments are closed.