According to Market Watch: “Word on the street is that the Federal Reserve may raise rates by 1% at their July 26 meeting — as they try to quell inflation that now sits at a 40-year high. Barron’s recently noted that: “With inflation so hot, the Fed’s next rate hike might be the biggest in decades.”

How does that effect mortgage rates? There is no direct link between the Fed and mortgage lenders. However, if the Fed is raising rates, you can rest assured that mortgage rates will go up. In fact , it is said that mortgage lenders very often factor in the increase in their own rates in anticipation of what the Fed is expected to do.

With interest rates going up a full point this month, and maybe another full point next month, you aren’t going to be able to afford as big a house as you were before. If you are considering purchasing a house in the future, you should meet with Ruth Schoenherr to see how much house you can afford in today’s market.

One can only assume that the rising interest rates are going to put the brakes on today’s red hot real estate market. One can only assume that the prices of more expensive homes will be affected the most.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net or call at 727 447-2418.