The Federal Reserve voted to raise the benchmark interest rate one-quarter of a percent on Wednesday, signaling a future uptick in mortgage rates. The unanimous decision, which was widely predicted by industry experts, was only the second time in a decade that the Federal Reserve raised interest rates.
Explains Janet Yellen, the Fed’s chairwoman, “My colleagues and I are recognizing the considerable progress the economy has made. We expect the economy will continue to perform well.”
While mortgage rates aren’t directly tied to the Federal Funds Rate, they tend to closely follow any decision made by The Fed. As a result, the average 30-year fixed rate crawled up to 4.19%, and is continued to rise. Rates have increased for seven weeks in a row, and are expected to slowly climb toward 5% in 2017.