Fed Raised Rates

Yet Mortgage Rates Declined

As you’ve heard, on June 15, 2022, the Federal Reserve raised interest rates by 0.75% – the biggest single jump since 1994.

That can feel scary, and it actually can be good for the housing market.  The objective of raising interest rates is to slow down prices across the board (not just in the housing sector).  The market we’ve been experiencing for the last couple of years could not (and should not) be sustained indefinitely. 

Remarkably though, the long-term mortgage interest rates fell slightly after the announcement.  The mortgage industry had raised rates a bit when buyers were everywhere and the market was hot.  They knew the hot sellers’ market couldn’t last, and now we’re seeing a shift that we’re referring to as a move toward normalization (a market that’s moving toward a better balance, not so lopsided in favor or one side or the other).  

The mortgage market is slowing down, yet we still have an unprecedented number of pre-approved buyers looking to find their perfect home in a pool of very few options.  The Fed rate hike does not necessarily (or immediately) signal a major change for the housing market.  It’s actually a benefit and should serve to bring the housing market into better balance. 

It’s still a wonderful time to trade real estate in Sarasota & Bradenton, especially if you’re down-sizing or a first-time buyer (I don’t need to point out that rental rates aren’t pretty!)   For more insight on this please email me.