12/7/2023 0 Comments Honda inventory shortageConsequently, many experts believe mortgage rates will remain above 6% for the remainder of this year. The Fed revealed new terminal rate projections in June that suggest the rate will reach 5.6% by the end of 2023, implying at least one more rate increase in 2023. In response to reporters at the post-meeting press conference, Federal Reserve Chair Jerome Powell stated the economy has yet to feel the full impact of the Fed’s actions and that the committee’s efforts to tame inflation to its 2% target still had “a long way to go,” The federal funds rate hovered near zero in March 2022 when the Fed began raising rates. The federal funds rate is the rate financial institutions lend to each other overnight.Ī Fed rate hike indirectly impacts long-term home loans, such as 30-year, fixed-rate mortgages. Mortgage rates rose the first week of July, jumping to 6.96% by mid-month as Federal Reserve policymakers voted to raise the federal funds rate by a widely anticipated 25 basis points at the July meeting. At the same time, high inflation and more interest rate hikes still hang in the air. Housing market activity remains weak overall thanks to high mortgage rates, elevated home prices and constrained housing inventory-a trifecta of headwinds perpetuating the housing affordability crisis. These and other factors form a perfect affordability crisis storm that continues to sideline many aspiring homeowners. Meanwhile, the median existing-home sales broke through $400,000 for the first time in 2023, hitting $410,200-the second-highest price ever recorded-and is now poised to surpass the June 2022 all-time high of $413,800.ĭespite high mortgage rates, the market remains as competitive as ever thanks to strong demand coupled with tight inventory supply, due, in part, to those who purchased homes in recent years at record-low interest rates staying put. regions posting year-over-year sales declines, according to the National Association of Realtors (NAR). Meanwhile, existing monthly home sales dropped 3.3%, with all four major U.S. A basis point is one-hundredth of one percentage point. The national average 30-year fixed mortgage rate ended in July where it started before edging near 7% the first week of August. Though summer temperatures have been scorching hot across many parts of the country, housing market activity remains tepid.
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