As was widely expected, the Federal Reserve raised the benchmark short-term interest rate at its Dec. 19 meeting. It had been at zero for seven years prior to the quarter-point increase. Greg McBride, CFA, and senior financial analyst at Bankrate.com, said to expect gradual adjustments to the prime rate over the course of 2016.
- Benchmark short-term interest rates went up in December, but won't in January.
- The raise in the rate last month means economic confidence.
- Buyers enter the market when they need to, but those already in look at longer term rates for more optional purchase, or as an investment strategy.