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You may have heard that the Federal Reserve  raised rates last week… But what does that mean if you are looking to buy a home in the near future?

Many in the housing industry have predicted that the Federal Open Market Committee (FOMC),  the policy-making arm of the Federal Reserve , would vote to raise the federal fund’s target rate at their December meeting. For only the second time in a decade, this is exactly what happened.

There were many factors that contributed to the 0.25 point increase (from 0.50 to 0.75) , but many are pointing to the latest jobs report and low unemployment rate (4.6%) as the main reason.

Tim Manni, Mortgage Expert at Nerd Wallet , had this to say,

“Homebuyers shouldn’t be particularly concerned with [last week’s] Fed move. Even with rates hovering over 4 percent, they’re still historically low. Most market observers are expecting a gradual rise in home loan rates in the near term, anticipating mortgage rates to stay under 5 percent through 2017.”

Bottom Line

Only time will tell what the long-term impact of the rate hike will be, but in the short term, there should be no reason for alarm.

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