Federal Reserve Chair Janet Yellen said Friday the Fed will likely resume raising interest rates later this March to reflect a strengthening job market.
So what does that mean for you if you're looking to buy or refinance your home?
Yellen didn’t say exactly when or how many of the rate hikes would occur, but she did note that Fed officials in December had estimated there would be three in 2017.
Mortgage Analyst Tim Beyers with American Financing says the rate hike could happen at any time.
"If you’re looking to buy a house, this would be a good time to lock in a rate if you can do it, because rates are lower right now," Beyers said. "The mortgage market is historically low right now.”
Beyers says if you’re an existing homeowner and are looking to refinance, now is a prime time to do so.
In the Denver area, you generally have twice the equity gain over the past three years than the rest of the country has enjoyed.
Many economists now say that barring an unexpectedly disastrous monthly jobs report next Friday, a Fed rate increase this month appears certain.
“Right now, we’re in a unique situation, with all time historic lows," Beyers said. "The chances of us ever getting back to the 1980s when rates were above 18 percent are almost none, so it’s really hard to say what the normal is with the fed, but generally, once the fed tells you they’re going to raise rates – believe them.”
If you’re looking to buy, Beyers says there are some things you can get in order first to save you time later. He suggests knowing what your financial situation is, get a credit report, and figure out how much of a house you can afford.
If you do all of that before you go shopping and before rates start to change, you’ll be in a better position.
He says you need to be prepared, and if someone is trying to rush you into making a purchase, take that as a red flag. Beyers says if you rush into a decision such as buying a home, you’re likely to regret it.
“A home is probably the biggest financial asset you have, if you own a home or are looking to buy, it’s going to be one of the biggest assets you will have, so go into it with eyes wide open,” Beyers said.
At the March 14-15 meeting, Yellen said the Fed's policymakers will "evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate."
The Associated Press contributed to this report.
