Here's how the latest Federal Reserve interest rate hike affects millions of Americans.
Given a loan of $400,000, the increase in interest rates has turned a monthly mortgage payment of about $1,700 into one approaching $2,300 in the span of just a few months.has started to cool the country's historically hot housing market
"These numbers are all going to get worse before they get better. It's going to be ugly during the transition, but I think what we'll end up with is a market which is more healthy because it is not healthy to have a housing market where home prices are rising 20% per year or more," Ian Shepherdson, the founder and chief economist at Pantheon Macroeconomics,That rapid increase in cost already has priced some potential homebuyers out of the market.
It's important to know that the Fed rate isn't the only factor that banks take into account when setting interest rates. Banks also consider how much cash customers have deposited and how much competitors are offering. So don't expect to see rates rise by .75%.
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