As mortgage rates continue to rise, prospective homebuyers face an increasingly challenging market. The Federal Reserve's recent rate hike cycle, aimed at curbing inflation, has indirectly pushed mortgage rates higher, though the full impact of these hikes may already be reflected in current rates. Given the uncertain trajectory of rates, financial experts recommend that consumers focus on factors within their control, such as improving credit scores and shopping around for the best rates.
This article from CNET does a great job summarizing the current state of mortgages and the impact that the Federal Reserve has had on the real estate market. Let me know if you have any questions about the article or if I can help with any of your real estate needs.
Tim Houterloot - Broker/Realtor
317-997-0165 - Cell
indyhomepro@outlook.com
Source: Realtor.com | Repost Houterloot 8/29/2023 -
This week, a few key mortgage rates crept higher. See how the Fed's interest rate hikes could affect your home loan payments.
A number of closely followed mortgage rates moved up over the last seven days. The average 15-year fixed and 30-year fixed mortgage rates both inched up. For variable rates, the 5/1 adjustable-rate mortgage also ticked up.
As inflation surged in 2022, so too did mortgage rates. To rein in price growth, the Federal Reserve began bumping up its federal funds rate -- a short term interest rate that determines what banks charge each other to borrow money. By making it more expensive to borrow, the central bank's goal is to reduce prices by curtailing consumer spending.
During its July 26 meeting, the Fed initiated a 25-basis point (or 0.25%) hike to its federal funds rate, marking its 11th increase in the current rate hiking cycle. The most recent increase could have an impact on mortgage rates, but experts say the markets may have already factored it into rates.
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