What does the increase in interest rates mean for you?

Last week the U.S. central bank has decided to raise interest rates with the potential to raise them up to 3 more times in 2017. According to the Wall Street Journal, “Fed Chairwoman Janet Yellen emphasized she would take a wait-and-see approach before deciding how to respond to Mr. Trump’s emerging economic agenda.” Ms. Yellen went on to say, “Our decision to raise rates should certainly be understood as a reflection of the confidence we have in the progress the economy has made and that it is expected to make”.

So what does this mean for you?

New Homeowners

For the emerging homeowner in 2017, it may be the difference between buying a house for $250k and $235k. The increased rates will decrease the buying power of many people nationwide. With millenials sitting on the fence longer than ever to purchase a home this increase in rates may keep them away from homeownership a bit longer. The low inventory on the housing market could get worse with some homeowners being reluctant to 1) sell their home without someplace to move and 2) reluctant to move from the great rate they currently have on their home. But not all is doom and gloom with the increase; people are still going to buy homes. Historically, rates have been much higher in the past than they currently are and people still bought new homes.


If you haven’t refinanced in the last 5 years, you may have missed the boat. With interest rates expected to continue to rise the opportunity to lower your existing rate is dwindling. I’m not sure what took so long or why you didn’t refinance yet, but it the ship may have sailed.

Only time will tell as the market settles into the New Year whether we can sustain these high rates and what affect it will have on the housing market. 2017 is knocking on the door but these rates may affect how many new homeowners there are to open it.


Zach is a Mortgage Advisor with State Bank in Dublin, OH. He writes and speaks regularly on the mortgage industry, personal finance, business development, and leadership. His focused approach on educating clients through the mortgage process allows him to help hundreds of new homeowners each year.

Learn more about Zach at www.mortgagecoachzach.com, find him on instagram @mortgagecoachzach, or call/text him at 740-398-4917.

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