10013121All eyes are on the Fed today as Janet Yellen is expected to announce the first raise in interest rates since 2006. The housing market has been slowly recovering from its March 2012 bottom (according to the Case-Shiller Index), but it’s been largely aided by near-zero interest rates. Thirty-year fixed-rate mortgages remain below 4%, down from 6% in 2008.

So is the still-fragile housing market in for a shock today? It’s a mixed bag says, Barbara Corcoran, investor on ABC’s “Shark Tank” and founder of The Corcoran Group, a large real estate company based in New York. “The immediate reaction will be the same as it always is when interest rates are raised: It creates a psychological deadline for anyone who’s thinking about buying and sitting on the fence,” she says. “They get right off the fence and think it’s their last chance to get in there, so you’ll definitely see an uptick in sales nationwide.”

Unfortunately the uptick in home sales will be short-lived, says Corcoran. If rates continue to rise at a rapid clip, sales will eventually taper off. Fannie Mae chief economist Doug Duncan believes that markets have already priced in the Fed’s move and the rate hike will have no immediate impact on Treasury or mortgage rates. But while some of the Fed’s impact has been priced in, this week has been a volatile one for the market, and volatility tends to be serially autocorrelated.

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