POSTED: Thursday, June 20, 2013 - 6:28pm
UPDATED: Friday, June 21, 2013 - 8:17am
Tyler , TX (KETK) — Federal Reserve Chairman Ben Bernanke says he expects the economy and the job market to improve by 2014.
And that means years of low interest rates may soon be changing.
At a two- day fed meeting, Bernanke said the federal reserve could pull back its $85 billion bond buy buying stimulus program.
The reason--he says the economy is doing better.
But, the Fed's buying up treasury and mortgage bonds helped keep interest rates at rock bottom numbers.
For you, that means money will cost more to borrow and can affect the house or car you can buy.
The Fed's bond buying program helped the housing market.
Bernanke says with these improvements, he sees the unemployment rate dropping to about 6.5% by the end of 2014.
But, that program has made money cheap.
Now, interest rates on cars and houses and other things financed will be higher.
"Well, the fundamentals look a little better to us in particular, the housing sector, which has been a drag on growth since the crisis, is now obviously a support to growth," said Bernanke.
Owner of Tyler Lending Group Kelvin Woodfin says in lieu of Bernanke's statement the days of low rates are coming to and end.
"If you're riding the fence and you think you want to be a home-buyer rates are still low they have moved up their definitely going to move up more so now is the time to do it," said Woodfin.
Realtor Jonathan Wolf says people looking to buy or refinance their house should be aware of the changes..
"Interest rates in the last month or so have seemed to creep back up to the 4% range which is still a wonderful rate," said Wolf.
Wolf says if you buy a house around $15,000 and your interest is at 3.5% your monthly payment will be about $1,131.
If you bought a house for the same price but your interest is at 4% your payment would be about $1,171
That's only a $40 increase a year.
But, according to Bernanke major changes won't be seen until the end of next year.