Now that the Federal reserve has officially started to raise interest rates, what will the ripple effect be to the mortgage market in 2016? Markets really haven?t reacted much. A lot of the expectations of the rate increase have already been built in.
As rates continue to rise?many feel the Fed will raise rates four times in 2016 of 25 basis points each ? we may start to see more of an impact on housing and what buyers can afford. As always, this will have a larger impact in expensive housing markets. ?Markets that are more affordable, where the average home price is less than $200,000, won’t be affected much.?The expensive markets are already markets where people are stretching. But, overall the effects will be relatively muted.