Hey Steve! What will FED rate increase mean for mortgage rates?

I asked "Mortgage lender to the Stars" Steve Dunnett, Blueleaf Lending what the recent Federal Reserve rate hike means for the average home loan.

Here's his quick response to me:

As expected the Federal Reserve raised the federal funds rate by 25 basis points, or .25%. I have already received many emails asking about how this will impact mortgage rates. Honestly I wish I knew but my crystal ball is a bit cloudy. Consumer loans (auto, helocs, student loans) will go up but the initial reaction for mortgage rates today was very minor. In fact, many of our lenders ended the day with better rates than where they were prior to the announcement. Mortgage rates will rise when inflation starts to rise because the investors that buy mortgages will require higher rates of return as inflation rises. In my opinion if you want to know what rates will do we need to keep an eye on inflation.  

Contact Steve anytime! Great knowledge, service and explains everything clearly until you "get it".

Steve Dunnett
Senior Mortgage Consultant
312-725-2068 (DIRECT)
708-289-3408 (CELL)
312-379-8844 (E-FAX)
SDUNNETT@BLUELEAFLENDING.COM

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