Fed rate hike pushes mortgage rates to highest level in over 13 years

Keller Williams chief economist Ruben Gonzalez expounded on Khater’s point: “Earlier this week, we saw a shift in market expectations around how aggressive a path the Fed is likely to take to combat inflation. Mortgage rates going forward will continue to be responsive to changes in expectations around the Fed’s policy path, as well as inflation expectations. The housing market is still extremely tight, with inventory levels remaining near historic lows, leaving room for the market to absorb falling demand.”

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Marty Green, principal at Polunsky Beitel Green, added: “It is clear in talking to mortgage company executives that the recent fluctuations in mortgage interest rates have increased the risks in an already challenging market and the belief that the sooner we get to a stabilized rate environment, even at elevated rates, the better it will be for the industry. The belief is that it will also restore a level of predictability for consumers so that they can more comfortably make their financial decision on a potential move to a new home.”

Based on their conversations with clients, Green believes many market participants approve of the Fed’s aggressive approach, “as there is some belief the Fed’s decision will more quickly bring stability to the home mortgage interest rate environment,” he said.

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