About half of Americans say they are concerned about the effects of rising interest rates, but not necessarily because of their impact on the housing market or credit cards, a new survey finds.
According to Bankrate‘s monthly Financial Security Index survey, 49 percent are worried about higher rates. That’s a big jump from a year ago, when 41 percent of people said the same.
The Federal Reserve raised short-term interest rates by a quarter of a percentage point in December 2015 and again last month. As a consequence, the prime rate increased half a percentage point over that time, to 3.75 percent.
Moreover, since the election of Donald Trump as president, average mortgage rates on the 30-year fixed loan have shot up about half a percentage point. Freddie Mac reports that the average 30-year rate is at 4.19 percent for the week ending Jan. 26, 2017, up from last week when it averaged 4.09 percent. A year ago at this time, the 30-year fixed-rate averaged 3.79 percent.
Despite the obvious impact of higher rates on the housing market, Bankrate’s survey found that the main worry among those concerned about rates is what they portend for the stock market. Fewer say they are concerned about their personal financial situations.
“As the stock market has moved higher, more Americans are concerned that rising interest rates could be the market’s undoing,” says Bankrate’s chief financial analyst, Greg McBride, CFA.
The next-biggest group says they’re not concerned about higher rates because they want the additional interest income on savings.