Inflation concerns are accelerating the Fed’s timetable for short-term interest rate hikes. After setting expectations of no interest rate hikes until 2024 in March, the Fed is now estimating two interest rate hikes in 2023. The reopening of the U.S. economy following massive fiscal stimulus, an extended period of low interest rates, and the Fed’s bond purchases on the open market in response to the COVID-19 pandemic has fueled a surge in inflation. The CPI index rose at an annual rate of 5% in May, the highest increase since August 2008. The Fed now expects inflation to rise 3.4% this year, well above the Fed’s 2.4% prediction in March. Notwithstanding, the Fed will continue with its $120 billion monthly bond purchases, although tapering discussions are not too far off.

The yield on the US 10 Yr moved up following the Fed’s update, closing at 1.57% yesterday. The Fed’s continued asset purchases should hold interest rate levels down. For how long remains to be seen.

Interest rates on FHA commercial loans are relatively stable since our last update in March. Check out today’s rates.

FHA Commercial Loan Rate Update – June 17, 2021

• 35-year fixed FHA perm loans: 2.45%-2.65%
• 40-year fixed FHA construction/perm loans: 3.00%-3.25% 

These pricing indications are current as of the date posted, subject to market interest rate volatility.  Pricing of FHA insured apartment and healthcare loans may be dependent on loan size and other risk factors. Call for more information.

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