The Fed met today and raised the Federal Funds Rate by .25%, the tenth time in about one year they have increased rates.
This change will increase short term rates, such as variable rate real estate loans, construction loans and lines of credit for businesses and homeowners.
Prime rate will now become 6.5%, up from 4.0% just over a year ago.
Treasury rates have slowly been increasing over the past several weeks. They are up almost .5% during this time. This raises fixed rate commercial real estate loans, and if they hold, will probably increase cap rates about the same amount. It will hurt the sales value of investment real estate.
