For only the second time since 2008, the Federal Reserve announced on Wednesday the decision to raise their benchmark interest rate. When the benchmark rate rises, so does the cost of borrowing for banks. In turn, banks pass that additional cost on to the consumer in the form of increased interest rates for home mortgages.
The Fed’s raising of interest rates can be interpreted as a positive sign, as the decision reflects confidence in our economy. In a press conference, Janet Yellen, Chair of the Federal Reserve, explained, “Our decision to raise rates should certainly be understood as a reflection of the confidence we have in the progress the economy has made.” While we are all for an improving economy, we realize that rising rates do impact those planning to buy or sell. So, what’s our take? It is a great time to take advantage of interest rates that remain historically low, before the Fed makes further rate hikes.