Last week, the Federal Reserve opted to raise the benchmark interest rate by 25 basis points, a move that is certain to impact mortgage rates and, therefore, housing affordability.
Rick Sharga of HousingWire believes that the rate hike could benefit the housing market, though. He says it could spur many potential buyers into making home purchases before rates rise again, and it may push lenders to loosen credit standards,
Sharga also says the 25 basis point increase is about what industry experts expected, which means that mortgage rates may not rise all that much.
In this scenario – motivated buyers, relaxed lending standards, and marginal mortgage rate increases, coupled with what appears to be strong wage and job growth – the spring-selling season could be the strongest one we’ve seen in many years.