Advice offered to would-be homeowners after latest rate hike

Amid such uncertainty, TransUnion has offered guidance for consumers as the Fed tries to pump the brakes on inflation.

“From a consumer credit perspective, the most significant impact of these rate hikes on borrowers will continue to be in the mortgage market, and increasingly, during the holiday shopping season, in the credit card industry,” Michele Raneri, vice president of US research and consulting at TransUnion, told Mortgage Professional America in a statement.

Raneri offered advice to those intent on buying a home – suggesting less traditional financial products until economic uncertainty wanes: “In the mortgage market, consumers who may otherwise be considering buying a home may choose to continue to hold onto their down payments, waiting to see if interest rates and/or home prices decline in the not-too-distant future,” she said. “For those consumers who do purchase a home, adjustable-rate mortgages may continue to be more popular among consumers seeking lower monthly payments in the short term. And consumers looking to tap into available home equity may continue to look towards HELOCs and HELOANs instead of refis. Finally, on the credit card front, this latest interest rate hike will most acutely impact those consumers who do not pay off their credit card balances in full through higher minimum monthly payments.”

In a June interview, Melissa Cohn (pictured below) – regional vice president at William Raveis Mortgage and a 40-year mortgage industry veteran – touted the use of adjustable-rate mortgages at least for the short haul while inflation is being tamed. She noted ARMs are different now then their iteration during the Great Recession of 2008.