Interest Rates

But that doesn’t mean mortgage rates will rise at the same pace.

Why?

• Market forces also influence mortgage rates. If investors shy away from stocks and invest in safer mortgage bonds, for example, rates may come down.
• If the Fed moves policy rates too far or too quickly, we could see a recession. Historically, that means lower mortgage rates.
• Mortgage rates had already risen in anticipation of a Fed move. They may settle down now that the Fed has spoken.

Does this mean you should wait for the possibility of lower rates?

Not necessarily.

I encourage my clients to consider all the moving pieces—not only in the markets, but also in their lives.

If this is the right time for you to buy a home or access cash from equity, then let’s find a way to work within the framework of the current interest rate environment. After all, rates are still lower than long-term averages, and there are options like hybrid ARMs, buydowns and HELOCs that can help in this environment.
Background on the Fed:

• The Federal Reserve Board (the Fed) controls the federal funds rate and discount rate, which are charges for overnight loans from bank to bank or from the Fed to member banks.
• The rate was lowered to near zero in March 2020 in response to the pandemic. These historic measures are now being reversed.
• This is the fifth increase this year.

After all, we’re still closing loans every day!