Wednesday, May 23, 2018 / by Carl Gentile
Why Have Interest Rates Jumped to a 7-Year High?
Sam Khater, Freddie Mac’s Chief Economist, had this to say:
But what do gas prices have to do with interest rates?Investopedia explains the relationship like this:
You may have noticed that filling your gas tank has become substantially more expensive in recent months. The average national gas price has climbed nearly $0.50 from the beginning of the year, leading to the highest price for Memorial Day weekend since 2014. As rates go up, your purchasing power goes down, but don’t worry; rates are still well below the averages we’ve seen over the last four decades.
Buying sooner rather than later will help lock in a lower rate than waiting, as the experts believe rates will continue to climb. Even a small increase in interest rates can have a big impact on your monthly housing cost. Bottom LineIf you are planning on buying a home this year, keep an eye on gas prices the next time you’re at the pump. If you start to feel a big jump in price, know that rates are probably on their way up, too. |