Categories
Make Money From Home

Mortgage Rates Are Over 6%, a Level Not Seen Since 2008. Why Next Week’s Fed Meeting Could Push Them Even Higher – NextAdvisor

Editorial IndependenceWe want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see Ho…….

We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

Key Takeaways

  • The rate for a 30-year fixed mortgage rose ten basis points to 6.12% this week, the highest since 2008.
  • The Federal Reserve is likely to raise its benchmark interest rate by 75 basis points next week in its ongoing bid to reduce inflation.
  • Mortgage rates may move even higher — or they may stay the same, experts say.

Mortgage rates are above 6%, the highest they’ve been since 2008. With the Federal Reserve poised to raise its benchmark interest rate again next week, they could move even higher, experts say – or they could stay basically the same.

Experts expect the Fed will favor an increase of 75 basis points in its key rate in its ongoing bid to bring down inflation. The latest consumer price index (CPI) shows an increase of 8.3% year-over-year in August, indicating inflation is still hot. If the CPI were even 0.1% lower, “the Fed might’ve been looking at a 50-basis-point increase,” says Shashank Shekhar, founder and CEO of InstaMortgage, a digital mortgage lender. 

Mortgage rates have roughly doubled since the start of the year due to high inflation, and jumped again this week, with the average 30-year fixed rate rising ten basis points to 6.12% in a survey by Bankrate, which, like NextAdvisor, is owned by Red Ventures. A similar survey from Freddie Mac, a government-sponsored entity that plays a key role in the mortgage market, showed that average at 6.02% – its first time over 6%  since November 2008.  

Both rates jumped after this week’s inflation report. That move might have been in anticipation of the Fed’s action next week – meaning we might not see much movement after the Fed hikes rates.

“If the Fed does what everyone expects them to do, I personally don’t see the 30-year fixed rate increasing,” says Nicole Rueth, producing branch manager with the Rueth Team Powered by OneTrust Home Loans. “I think what happened after the CPI report was that reaction baking in.”

Here’s what experts anticipate is coming for the mortgage market, and what it means for borrowers.

What to Expect from the Federal Reserve 

The Fed won’t make its decision official until Sept. 21, but experts often have a good idea what’s coming, and how it might affect mortgage …….

Source: https://time.com/nextadvisor/mortgages/mortgage-news/mortgage-rates-6-fed/

Leave a Reply

Your email address will not be published. Required fields are marked *