In these uncertain times, a fluctuating market and increasing mortgage rates can make buying a house seem overwhelming, if not impossible. Founder and CEO of Christopher Paul Financial LLC (CPF Mortgage), Justin Kelly, recently released a statement regarding the state of our current housing market. In his statement, Justin described the reasons behind increasing mortgage rates, the status of the Federal Reserve, and how nationwide inflation contributes to the mortgage rates.
Here is a breakdown of what you need to know about the state of our current housing market and your home buying options.
In order to compensate for increasing inflation and nationwide economic concerns, the Federal Reserve is increasing interest rates. These increases are intended to slow the effects of growing inflation and stabilize the economy, in order to prevent another recession. Despite the surprisingly stable job market and strong wages, combatting a potential recession remains a top concern among the federal government and the American people alike.
Last month, the Federal Reserve (Fed) raised interest rates by 0.75 percentage points, the largest rate increase since 1994. The Fed plans to announce its next rate increase decision on July 27th, taking the latest employment and inflation figures into account. According to The New York Times, an estimated 0.5- or 0.75-percentage-point rate increase is currently on the table. Although we will not know the final decision until later this month, economists are predicting a 0.75 increase, saying that this will be the best way to combat rising inflation and help stabilize the economy.
While the Fed does not directly control mortgage rates, the proposed increased rate on federal funds will directly affect home financing options. As of July 6, 2022, the average rate on a 30-year mortgage is 5.55%. That is an increase of over 2% from this time last year. Unfortunately, as inflation rates increase, so do mortgage rates. The bright side is that inflation has not yet peaked and that the actions of the Fed are trying to prevent drastic economic ramifications.
While there are elements of the mortgage rate increases that are out of the individual's control, there are several actions that you can do to ensure that you qualify for the best rate:
Navigating our current housing market and economic fluctuations can seem stressful but it doesn't have to be. CPF Mortgage is here to provide our community with the best interest rates available and expert home-financing support devoted to your customer care. If you're interested in refinancing or purchasing a home, or if you want more information on our current market please reach out by filling out our contact form.