Everything you need to know about recent interest rate changes.
Have you heard that the Federal Reserve recently raised interest rates again by 75 basis points? If you’re looking to buy a home, you’re probably frustrated by this news, but I have some information to share with you that might soften the blow.
In reality, interest rates and mortgage rates are correlated, but they don’t follow each other exactly. Yes, higher interest rates mean that mortgage rates will probably increase, but they won’t go up by the full 0.75%. Instead of following interest rates, mortgage rates are driven by the open market and expectations about the future of our economy.
This means that inflation is the bigger culprit in our higher mortgage rates. Nothing hurts an economy worse than inflation, and mortgage rates are reacting appropriately. Inflation is also the main reason why the Fed is continuing to raise interest rates.
Many people thought that interest rate hikes were done for 2022, but now it looks like rates will continue to rise throughout 2023 and possibly even 2024. That may sound scary, but we’ve seen higher interest rates before, and we survived. Still, buyers should consider getting into a home as soon as possible. The longer you wait, the higher your mortgage rate will likely be.
Now might also be the last good time to refinance your debts. If you need help or have questions about anything I discussed today, please call or email me, I am always willing to help.