For home buyers, finding affordable options can still be a challenge. The Federal Reserve has raised its benchmark interest rate, which is based on the cost of borrowing across the economy, to a 22-year high as it tries to cool the economy and reduce inflation. While price pressures are easing, with annual inflation falling from about 9% last year to just 3% last month, the recent rise in gasoline prices could support inflation figures.
Central bank officials have suggested that further rate adjustments are possible this year. They expect a rate cut in 2024, but believe it could be years before rates return to the low levels that were normal before the pandemic.
Mortgage rates typically track the yield on the 10-year Treasury, which is influenced by a variety of factors, including inflation, Fed actions and how investors react to them all. On Thursday, the yield on the 10-year bond rose above 4.3 percent for the first time since 2007.
For home buyers and market watchers, the question remains: How long will mortgage rates stay high?
Rates will begin to gradually decline next spring or by the end of the year, when Yoon expects them to fall to double the rate in 2021 to 6.5%. But he spoke about the Fed’s fight against inflation and the recent downgrade in the country’s credit rating. Put pressure on mortgage rates.
“The real estate market is in trouble,” he said.
