What the Fed’s interest rate hike means for NYC real estate

From the January issue: New York City homebuyers have been hearing about a possible interest rate hike for several years now, but just how much different will the post-hike landscape be for the market here?

After seven years of holding the line, the Fed raised its benchmark interest rate by 0.25 percent on Dec. 16 and said it would increase rates by about 1 percentage point a year over the next three years.

Those projections would result in the fed funds rate, an overnight lending rate, hitting 3.25 percent in three years — a fact that Fed Chairwoman Janet Yellin said reflects “our confidence in the U.S. economy.” The hike is expected to put gradual pressure on longer-term interest rates, including 30-year mortgage rates which as of November averaged 3.94 percent. [more]