Taking aim at stubborn inflation, Jerome H. Powell Federal Reserve announced a rate hike of 0.75%. yesterday. That is the fourth rate increase this year by the Fed. But if you still think that means mortgage rates moved higher, think again. The market was already expecting a 0.75% rate hike. Mortgage rates may readily ignore a Fed hike on the day it is announced, but they remain very interested in Fed rate hike expectations.
Mortgage Rates Down Slightly
Purchase demand continues to tumble as the cumulative impact of higher rates, elevated home prices, increased recession risk, and declining consumer confidence take a toll on homebuyers. It’s clear that over the past two years, the combination of the pandemic, record low mortgage rates, and the opportunity to work remotely spurred greater demand. Now, as the market adjusts to a higher rate environment, we are seeing a period of deflated sales activity until the market normalizes.
