FED Interest Rate Hikes.
Watch the original video: FED Interest Rate Hikes.
Here is your Monthly Mortgage Update for August 2022. In this month’s video I discuss the Fed’s impact on the housing market, mortgage rates and current housing statistics. Watch my video to learn more.
⁉️ The Fed’s Impact
Simply put, the Federal Reserve has two jobs, to keep inflation and unemployment low. At the beginning of the year we saw them raise the Fed rate in an effort to slow buyer demand and decrease inflation. Inflation has remained high, so the Fed raised rates yet again. This has impacted people’s ability to borrow money, and began to slow down our economy. Now, the challenge is decreasing inflation without ruining the economy.
👷🏽♂️ Unemployment Issues
Currently unemployment is a factor. Large corporations like Amazon, Bank of America and Walmart have publicly announced that they will be cutting back on their work force. We have also began seeing this happen on a local level. The big question is, how will this effect the housing market, volatility in stocks and interest rates?
💰 Interest Rates
Mortgage rates have risen faster than they ever have, but they are beginning to lower. Many buyers who did not want to purchase a home because they were concerned about rates, are now stepping back into the market.
🏠 Housing Market
Inventory has risen and we are seeing more homes available, which has convinced some sellers to make a deal. Many homes are selling below asking price or sellers are paying more towards closing costs. The question everyone has is, are we heading into a housing market crash?
No one really knows where the market is going to end up, however there are 2 outcomes that may be likely. One potential outcome is that the market will not crash, and this current market is short lived. It’s plausible that in 6 - 12 months we could see the market rebound. What we are currently seeing on a national level is that there is an increase in housing inventory, allowing for buyers to find great deals. But no one knows how long this current market will last. So, buyers who are on the fence, and waiting for the market to crash or home prices to drop even further, this strategy could cost you more in the long run.
👨👩👧👦 First Time Buyers
Many first time homebuyers over the past 2 years have been priced out of the market. Today I am happy to say that, many first time buyers are finally able to enter the market, write offers and don’t have to worry about 20 other people writing offers at the same time. Hopefully this continues to be the trend, but as always we will continue to update you as things change.
🙌🏼 Thank You.
Lastly, I just wanted to say how much I appreciate everyone. I have been doing this for over 20 years now and it is such a pleasure to receive referrals from those of you that have continued to use me as your lender over the years. If there is anything I can do for you or if you are transitioning out of California please reach out. I am licensed in multiple states and I am always here to help. Take care and God bless.