“Hopefully the rate hike encourages clients to get into the market because rates are finally going the other way,” Larry Penilla, an originator with A&M Mortgage Group, told Mortgage Professional America. “The markets have already reflected the rate increase for the most part.”
The Federal Reserve announced its benchmark rate target Wednesday afternoon and, as expected, raised the target for its benchmark rate. It was the first increase since June 2006 and one some brokers believe will have little impact on business.
“Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent,” the Fed said in a release. “The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”
The Fed committee said economic activity has been expanding at a moderate pace; household spending and business investment have increased over the past few months.
The decision was also influenced by ongoing jobs gains and declining unemployment.
“The increase isn’t enough to have a real impact on business,” Mark Speegle, an originator with Schmidt Mortgage, told Mortgage Professional America. “It may impact refinances, but not in a huge way; with a rate increase like this, it’s all about educating the buyer.”
Some may expect the Fed rate hike to have a slight cooling effect on the housing market, but at least one industry player is optimistic about the impact it will have.