There has been speculation for months and yesterday it happened. The Fed bumped interest rates .25%. The speculation also included two more rate hikes this year and more in 2018. There is no indication any of that has changed. As long as the economy continues on like it has, those hikes are very likely. Rate hikes are a sign of a good economy but it also makes us wonder how those interest rate hikes will impact mortgage rates.
The Fed rate doesn’t impact mortgage rates directly. In fact, we may not even feel it in the mortgage market. Long term rates are tied to the ten year Treasury yield. The Fed’s rate increase is more likely to impact your credit card interest or auto loans than the rate on a 30 year fixed loan or on your savings account.
Mortgage rates will likely increase due to a strong economic indicators, or even speculation of a strong economy. Unfortunately, exactly when that will happen is not as obvious as the Fed rate increase is.