The dog days of the summer market
As September rapidly approaches, experts are weighing in on what homebuyers can expect from the fall market, especially as mortgage rate benchmarks hit their highest levels in over 20 years. Will things change notably in the near future?
A lot continues to hinge on whether the Federal Reserve continues to increase interest rates at its September meeting, which could in turn drive mortgage rates even higher. While the recently released minutes from their July meeting suggest that further rate hikes remain on the table, many are wondering whether the housing market has reached its limit. And that’s likely one aspect the Fed will weigh as well in deciding what the market can handle in pursuit of a “soft landing” that helps to mitigate inflation without tanking sectors of the economy.
There’s no question that things are tough for buyers right now. But this doesn’t mean the market is completely dead or that there’s no possibility of rates coming down in the near future. If the Fed moves away from rate hikes towards the end of 2023 and into 2024, there’s the possibility that we’ll see rates drop and affordability increase. The challenge right now is that those locked into lower mortgage rates are reluctant to sell, driving down inventory and sustaining demand and prices.
-Robert Heck, VP of Mortgage @ Morty