Thursday, March 16, 2017
As we indicated with our November 10th Blog,
the Federal Reserve voted yesterday (Wednesday March 15th) to again raise the key interest rate one-quarter percentage point. This is just the first of three hikes we anticipate for 2017. The rate was increased one-quarter percentage point just three months ago in December 2016. This was the probable outcome following encouraging employment figures in February.
We believe this consecutive increase marks a turning point in policy. The Fed raised the rate only twice in the past decade. Wednesday’s decision quickens the pace, signaling the potential for more aggressive action as the year unfolds.
Rising rates have been top of mind for members of the housing industry, especially those of us in residential finance. Raising interest rates with the unprecidented apprecition witnessed in Texas, makes the fear of affordability a viable concern. We know in speaking with many of our potential homeowners the anticipated monthly payments on homes in various price ranges have "felt" higher. This is something which will continue to play out throughout 2017.