Fed raises rates. Is it time to buy in Denver?
The Federal Reserve raised its benchmark interest rate this week. Why should you care? Because lenders tend to follow suit with their mortgage rates. In general, a small increase in the Fed's rate doesn't affect lending rates in a big way, but even a small increase in mortgage rates can have an impact on you. And the Fed, along with announcing its increase, also indicated it may raise the rate again a few more times this year.
Let's look at a real-life example of what this could mean for a buyer in Denver. The average mortgage rate this month is around 4.3 percent, and the median home price in Denver is $449,000. (If you did a traditional 20-percent-down option, that's a loan of $359,000.) If the borrowing rate were to increase by even half a point in the next year, that would mean your monthly mortgage payment would increase by $107.
If you've been thinking about buying your dream home or investing in a rental property, it might be a good time to move forward. If you have any questions about the Denver market, reach out today and let's chat.