The Fed raises their rate by 0.75%, and what happens?
That’s right, the conforming 30-year fixed rate went down this afternoon.
Chairman Powell said again that intends to cause a reset in the real estate market, but our rates really shouldn’t go up much the rest of the year because at least 1% is already built into the current rates. If it weren’t for Powell’s threats, the 30-year fixed would be around 5.25% today (10-yr T-bill index + 1.75%).
Rob Dawg and Garry might have to wait until next year before we have a chance of seeing a 7% mortgage rate, and those of us in the higher-priced areas should keep our focus on the 30-year jumbo rate. It will be what most financed buyers around the coast will be getting.
Rates will hit 8% before the end of the year.
And will keep going up, you ain’t seen nothing yet.
Powell said pint blank that he intends to crash the housing market, listen to his press conference yesterday.
I listened to it, and he has been clear about his intent.
It is disturbing that he is just guessing that his actions will reset the housing market, and that he doesn’t look any further into the potential impacts.
Have you considered the other potential outcomes, or are you one of those binary guys like Powell who just simply assumes that higher rates will reset housing?
So you know, if it somehow magically resets, it will really benefit me. I’d love to start over and give another generation a shot at taking advantage of homeownership. Churn, baby, churn!
But sellers get a vote, which Powell isn’t considering. Any reset or correction will be dependent upon inventory, and if it dries up, it could take several years to sort this out, with the more affluent buyers at some point just surrendering and jumping into the market before it adjusts enough to make any real difference.
When the most important economic factor, the price of money aka interest rates is set by a bunch of senile academicians, there is no free market.
Some benefit some lose, whence billions spend in lobbying in DC.
I think Powell has been beyond incompetent, his buying of billions MBS in March while house prices were increasing 20% was criminal.
Why is it that home price increases are viewed positively when it is just inflation that benefit homeowners?
As Fed has no choice but to sell bonds, the rates will go up, and I wont be surprised if we hit 10% next year and people will lose their jobs and the inventory will go vertical. Some things never change.