How the Fed Rate Increase Will Affect Mortgage Borrowers


This week, the Federal Reserve is expected to raise its benchmark rate, but it does not necessarily mean home buyers should panic.

The benchmark rate hasn’t been increased in a decade, making it difficult to predict how the market will react.

“You’ll clearly have some reaction in the market, even though [the rate increase is] expected. Just the reality of it plopping in their laps is going to create some volatility, not only in the bond markets but also the equity markets as people try to sort this out. People should expect prices of bonds and equities to start to gyrate,” said Bob Walters, chief economist at Quicken Loans.

Image via Flickr/Rachel Elaine.

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