Home News The Fed’s next interest rate hike ‘might be the biggest in decades.’ So we asked 6 real estate pros: What might that do to mortgage rates?

The Fed’s next interest rate hike ‘might be the biggest in decades.’ So we asked 6 real estate pros: What might that do to mortgage rates?

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What will happen to mortgage rates soon?

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The street word is that the Federal Reserve could raise interest rates by 1% at its July 26 meeting — as they are trying to quell inflation, which is currently at its highest level in 40 years. Barron’s Recently, he said: From many other sources, such as “The Fed’s next rate hike could be maximal in decades because inflation is so intense.” CNBC To CBS News — We estimate a rate hike of about 1% at the meeting. If the Fed raises rates, what does that mean for mortgage rates? ((((Look at the lowest mortgage rates you can get here right now.) We asked six professionals about their thoughts.

The first thing to note is that the Federal Reserve does not set mortgage rates and there is no direct link between central bank movements and what happens with mortgage rates. However, “it is often said that mortgage lenders will raise future Fed rate hikes to the mortgage rate hikes they offer,” said Jacob Channel, senior economist at Lending Tree, before the Fed announces. I am saying. “Inflation is reasonably high, and economic uncertainty seems to be increasing for both consumers and businesses, so some lenders may feel forced to raise rates,” the channel said. I am saying. This means that even if the Fed announces a bigger than expected hike, interest rates could actually stay at current levels, he says.

However, if rates rise, Channel does not expect them to exceed 6%. And he adds that even if it soars after the next announcement, it could fall again shortly thereafter. “This happened when mortgage rates rose 50 basis points to 5.78% after raising 75 basis points last month and eventually fell to their current level of about 5.51%. That’s what Channel says. ((((Look at the lowest mortgage rates you can get here right now.).

Greg McBride, Chief Financial Analyst at Bankrate, said: .. In fact, more rate hikes mean less rate hikes later. This means that the peak interest rate schedule will be raised and the final rate cut due to the economic downturn will occur sooner. “But this all depends on and assumes that inflation will peak soon, otherwise all bets will be invalid,” says McBride.

Shawn Roberts, chief operating officer of home sales startup Orchard, said a 1% increase wouldn’t have a significant impact on mortgage rates in the short term. “The mortgage rate is much more correlated with the 10-year Treasury yield, which is determined by market power, not the Fed’s policy rate,” Roberts said. ((((Look at the lowest mortgage rates you can get here right now.).

However, NerdWallet’s mortgage and housing expert Holden Lewis said the immediate results could be that mortgage rates could rise to less than a quarter percentage point, while investing after digesting the news. Homes put the federal government at high risk of a recession. “The fear of a recession could actually lower mortgage rates, and the mortgage rate trajectory is used by central banks to explain their actions, not just how much they raise the federal funds rate. It also depends on the language, “says Lewis.

Cameron Findlay, Chief Economist at AmeriSave Mortgage Corp, said the Fed’s increase in scale is already on the market, as mortgage rates are highly dependent on future expectations. And it’s not surprising that mortgage rates could actually fall if the Fed doesn’t raise 1% completely. Time in a volatile market is very important and a loan can cost thousands of dollars if you’re not careful. “

“If the Fed raises rate hikes by 1% and is confident that future rate hikes will continue to fight inflation, mortgage rate hikes, if any, will only rise moderately from now on. It’s possible, “said Eileen Derks, head of mortgages. Laurel Road.

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