It’s doubtful most consumers will see an effect from the Federal Reserve’s quarter-point federal funds rate hike on the interest rates they pay, said Robert “Tino” Sonora, an economics professor at Fort Lewis College.
The rate increase is indicative of an improving economy, Sonora said.
“Markets were looking for a positive sign from the Fed, and that’s all I think they’re trying to do,” he said. “I don’t think this was a surprise. The focus was to send a message to markets in general that the economy is on a firm footing.”
Sonora said he would be surprised if the rates get above 1.25 percent by December of next year.
On housing, a constant topic of interest in La Plata County, little impact is expected. Before the increase, the interest rate was at about 4 percent. With the increase, if a home buyer borrowed $280,000 on a $350,000 home the buyer would pay about $41 more a month.
Don Ricedorff, a real estate agent with The Wells Group, said the increase isn’t likely to shake La Plata County’s housing market.
“I’m not saying it’s not significant, but if they qualified for a loan before, they can probably still make it work.”
jpace@durangoherald.com
