For the first time this year, and only the second time in the last 10 years, the Federal Reserve raised interest rates on Wednesday, a widely expected move following strengthening economic reports and signals from Fed officials.After its two-day policy meeting, the Federal Open Market Committee unanimously voted to raise the range of the federal funds rate to 0.50% and 0.75%, citing progress in economic activity and labor market growth.

What will this rate hike mean for First Time Home Buyers?

Our take on this is that it probably won't mean a whole lot in the short term.  Sure, higher rates don't help more people qualify for mortgages, but they do tend to stall inflation including housing prices which have taken a significant turn upward in the last few years. Also many likely First Time Home Buyers don't qualify far more often due to the required downpayment than income issues. Borrowers insured through FHA loan programs are still faced with coming up with a 3.5% downpayment. (That's $7000 on a $200,000 house purchase) plus the required closing costs which can range from $6000 and up for title insurance, home inspections, transfer tax, etc.
More than likely it will have a "shake the trees" effect and bring buyers into the market.  Consumers are so conditioned to interest rates being at low levels (since they've been there since 2009) that it's not been much of a concern.  With a new presidency and monetary policy coming in 2017, plus a strengthing economy, our bet is that rates will be going up at least a couple more times in 2017. If you are a First Time Home Buyer and need more information on home buying or would like a rate quote, please follow the links below.

http://www.netequityloans.com/1stTimeHomeBuyerLoans