Source: Bankrate —
In an effort to rein in raging inflation, the Federal Reserve boosted interest rates in mid-March. The move had been anticipated by the mortgage market — mortgage rates rose to 4.4 percent in a recent Bankrate survey of lenders, which was completed just before the Fed’s announcement.
The Fed’s hike is designed to cool an economy that has been on fire since rebounding from the coronavirus recession of 2020. That dramatic recovery has included a red-hot housing market characterized by record-high home prices and record-low inventory.
Home prices are driven not just by interest rates but by a complicated mix of factors, so it’s hard to predict exactly how the Fed’s new direction will affect the housing market. In the short term, higher rates are challenging for both homebuyers (who have to cope with steeper monthly payments) and sellers (who could experience less demand for their homes).
;
