A few weeks ago, the Federal Reserve raised its prime rate of interest by a quarter of 1 percent — the first increase in many years. Learning about this imminent move in advance, many homeowners hurried to beat the action by refinancing their homes.

"Still, the uptick in refinance applications couldn't keep overall mortgage activity up," as was reported by the National Association of Realtors.

"Total applications for refinancings and home purchases dropped 1.1 percent overall, pushed down by a 3 percent week-to-week drop in home purchase applications. However, home purchase applications are still 34 percent higher than the same week one year ago."

One economist pointed out that "Some borrowers may have moved to lock in current rates in advance of the Fed's increase," said Michael Fratantoni, chief economist for the Mortgage Bankers Association. "The Federal Reserve's move to raise the Federal Funds rate was the first in 7 years. The average 30-year fixed-rate mortgage currently averages 4.14 percent," MBA reports.

"Mortgage rates follow longer-term bond yields, so an increase in the Federal Funds rate will not necessarily send mortgage rates up, CNBC reports. That will greatly depend on how investors react to Fed Chair Janet Yellen's statements about the economy. Mortgage rates are largely predicted to edge higher by the end of 2016," the NAR reported.

"Even if there weren't Federal Reserve intervention, the income a first-time home buyer will need to buy today's starter home a year from now will increase," says Mark Fleming, chief economist at First American.

"Yet, we estimate the difference to be only $700 more. The price of admission into home ownership is going to rise, in part because of the leverage-assisted asset inflation caused by the low-rate environment. The time for rock-bottom mortgage rates needs to end, and the end of this era will only have a very modest impact on affordability for the first-time home buyer."

Q: Has the Fed stopped its reinvestment program?

A: Here's a quote from HSH Marketing Trends: "While the Fed did raise short-term rates, it chose not to terminate its program of reinvesting inbound proceeds from its massive balance sheet into new Treasury and MBS buys.

"This will continue to provide reliable support to help keep long-term rates — and mortgage rates — lower than they would otherwise be. The program will persist for some time, at least according to the Fed's release, 'until normalization of the federal funds rate is well under way,' whenever that may actually be."

Q: Why are more homeowners starting or planning for remodeling projects?

A: According to the National Association of Realtors' 2015 Remodeling Impact Report, which uncovers the reasons homeowners choose a remodel and the increased happiness certain projects bring once completed, 64 percent have experienced increased enjoyment in their home after completing a remodeling project.

"Additionally, 75 percent of respondents said they felt a major sense of accomplishment when thinking of their completed project. Fifty-four percent of respondents felt happy about the changes to their home, and 40 percent felt satisfied. As for their reasons to complete a remodeling project, 38 percent of homeowners said they wanted to upgrade worn-out surfaces, finishes and materials; 17 percent wanted to add features and improve livability; and 13 percent believed it was time for a change."

Q: Are mortgage applications decreasing?

A: No. Applications are increasing at this writing. Mortgage applications increased 7.3 percent from one week earlier, according to data from the Mortgage Bankers Association's Mortgage Applications Survey.

"The refinance share of mortgage activity increased to 62.8 percent of total applications from 60.7 percent the previous week. The adjustable-rate mortgage share of activity increased to 6.1 percent of total applications.

"The FHA share of total applications decreased to 12.9 percent from 14.0 percent the week prior. The VA share of total applications decreased to 10.5 percent from 11.2 percent the week prior. The USDA share of total applications remained unchanged from 0.6 percent the week prior."

To find out more about Jim Woodard and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com. Jim Woodard's email: [email protected]. COPYRIGHT 2015 CREATORS.COM.

Photo credit: