Federal Reserve Raises Federal Funds Rate; Rising Home Mortgage Rates Expected to Follow
Due to strong economic indicators and continuing low unemployment rates around the country, the governing board of the Federal Reserve, as expected, announced yesterday that it has decided to raise the federal funds rate a quarter point to 1.75%. The federal funds rate is the rate at which depository institutions lend reserve balances overnight to other depository institutions, and it affects all other short-term and long-term interest rates such as home mortgage interest rates. Home mortgage rates in the US, however, are not established by the Fed. Instead, mortgage rates are set by the price of mortgage backed securities sold on Wall Street. Generally, however, mortgage rates tend to rise when the Fed believes that the US economy is strong. Therefore, home buyers and those looking to refinance their home mortgages in Georgia and around the country can expect higher home mortgage rates in the coming months.
Buying a new home or refinancing in the Atlanta area or anywhere else in the state of Georgia? Contact Peachtree Mortgage Services, Inc. by email at peachmtg@bellsouth.net or by phone at 770.481.0052.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.