Borrowing money just got more expensive as the Federal Reserve Board raised interest rates Tuesday by a quarter point — for the fifth time since June. Wells Fargo economist Sung Won Sohn says Iowans who are thinking about buying a home might want to step up the pace.Sohn says “Because we do know interest rates, including the mortgage rate, will be trending up, but if you don’t find the right house and you’re not in a financial position to do that, I wouldn’t mind waiting either because we’re not talking about mortgage rates really spiking up any time soon.” The Fed hiked its benchmark lending rate to its highest level in three years, but the two-and-a-quarter point level is still considered quite low. Sohn expects the rates to continue climbing.Sohn says “The Federal Reserve basically is trying to get ready for possible inflation down the road. We don’t have an inflation problem. The central bank wants to mop up excess liquidity so if and when they have to combat inflation, they would be ready for it.” Sohn says even though the Fed has hiked rates five times this year, interest rates are still at levels that encourage borrowing and spending.
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