As the Federal Reserve added another interest rate hike sending mortgage rates soaring well above 7%, housing experts are pondering what’s next for the market that’s showing some instability.
“This process is going to take some time, everything is not going to magically change in a minute,” Bess Freedman, CEO of real estate firm Brown Harris Stevens in New York City told USA TODAY shortly after the Fed’s increase.
In anticipation, “the mortgage market has already priced in the latest Fed move. Still, mortgage rates are near 20-year highs, and that hurts home buyers,” Lawrence Yun, chief economist for the National Association of Realtors said in a statement. “Once inflation is contained, mortgage rates will start to drift lower. It may be another year or two before that happens.”
Dan Richards, executive vice president of mortgage for Flyhomes, a startup that helps qualified buyers get into homes by providing all-cash offers to sellers, agrees with Yun that mortgage interest rates likely won’t fall for some time.
“If Powell says they’re not changing their plan, rates will likely stay where they are,” Richards said.
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