Fed Rate Hikes Slow Inflation but Squeeze Housing Market
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The Fed has raised interest rates in 2022 to fight high inflation, but a soft landing with falling inflation and steady unemployment may be in sight.
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Through rate hikes, inflation has fallen while unemployment is essentially unchanged - indicating the economy continues growing.
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However, higher mortgage rates have caused monthly home sales to drop to levels not seen since the Great Recession.
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Mortgage rates have started to fall recently as expectations grow that the Fed may stop raising rates soon.
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Across 10 cities, higher rates have cut buyers' purchasing power in half over the last 2 years based on median list prices.