Markets can expect a 0.5% Federal Funds Rate increase, as per the latest Federal Reserve Meeting Minutes. The vote was almost unanimous with all but 2 members voting against this – in favor of an even higher increase.

The latest meeting minutes also revealed that the Fed will start to reduce their agency mortgage-backed securities at their coming meeting, putting additional upwards pressure on Mortgage Rates.

What does this mean to you?

For Home Buyers and Investors, expect rates to continue to rise. Rates the national average for 30 year mortgage rates are currently at 5.08%, as per Mortgage News Daily.

Home Buyers, please factor an increase in rate when considering your home purchase. Pre-Qualifications & Pre-Approvals can become obsolete in a matter of a week. You’ll want to work closely with your Loan Officer in monitoring rates in accordance to your loan qualification amounts.

Investors, please factor in higher interest in your rent calculations. To be safe, add an additional 1% to whatever the current market rate is.

Future Outlook

If you’re shopping for a home, expect the market to shift from a Seller’s Market to a Buyer’s Market. Prices are unlikely to come down, but should slow transactions. Work closely with your Realtor as you’ll start to have the upper hand in your shopping & negotiations.

Investors, the market slow down will start to really free up good deals. We should see an increase in Motivated sellers as transactions slow down and buyers are pushed down market. This trend is likely to continue into next year, so stay on top of your numbers.

For more information or questions, please reach out to 832-400-6460 or shoot me an email to alex@alexdoesloans.

[Source: https://www.federalreserve.gov/newsevents/pressreleases/monetary20220316a.htm]