What does a Fed rate hike mean for housing and for you?

The housing market rode historically low interest rates for years now, and this marks the first time in recent memory most analysts think they will take action on rates, bumping them 0.25%.Most American economists are about 80% certain a rate hike is coming. Even European analysts expect a hike. In a recent Société Générale US Credit comment, analysts tell its equities investors the Fed will move ahead – most likely Wednesday, but by October or December for certain.“If the Feds decide to increase the rate at their meeting tomorrow, any increases in rates will be nominal and gradual. Impact on home-buyers will be minimal,” says Selma Hepp, chief economist for Trulia. “For example, an increase of 25 basis points on a mortgage loan of $250,000, raises the mortgage payment by $35. I don’t think that will turn people off from buying a home, but they may end up looking to buy a slightly less expensive home.”

Hepp says however, the markets’ recent impulsiveness may still result in an initial knee-jerk reaction to any changes in Fed’s policy causing some jump in rates.