Will The Housing Market Improve With Inflation Slowing? – SFGateFebruary 14, 2023
In response to inflation peaking in 2022, the Federal Reserve hiked overnight bank-to-bank lending rates eight times since the start of last year,” says Jeff Taylor, founder and managing director of mortgage services provider Mphasis Digital Risk. “This caused mortgage rates to spike [by] more than 3% in 2022.”
Fortunately, most expert housing market predictions show mortgage rates holding steady or even declining as the year goes on. According to MBA, rates will likely hit 5.2% by year’s end. Fannie Mae, on the other hand, predicts a slightly higher 6.3% — roughly where mortgage rates were at the beginning of February.
“Fannie Mae’s projections are following the Fed’s strong stance that, even if they slow or stop hikes of overnight bank-to-bank rates, that they’ll still keep these rates higher for longer to squash inflation,” Taylor says. “This is ultimately good for the inflation fight, the long-term resilience of the economy, and for homebuyers.
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