The Federal Reserve is holding interest rates steady following its September 19-20 meeting, leaving the federal funds rate at a target range of 5.25 to 5.5 percent. While it stood pat this time, the Federal Reserve has raised rates a total of 11 times during this economic cycle in an effort to significantly reduce liquidity to the financial markets and tamp down high inflation. The last time the Fed raised rates was at its July meeting, and many analysts are waiting to see if the Fed will raise again during this economic cycle. Projections show an additional rate hike could be on the way before the end of the year if conditions warrant.
Mortgage rates continue to linger above seven percent as the Federal Reserve paused their interest rate hikes. Given these high rates, housing demand is cooling off and now homebuilders are feeling the effect. Builder sentiment declined for the first time in several months and construction levels have dipped to a three-year low, which could have an impact on the already low housing supply.
