What Raising Mortgage Rates Mean For First Time Home Buyers

For the last two weeks mortgage rates have cooled off from what has been consistent interest rate hikes throughout the whole year of 2022 thus far. Reports early this week are showing rates are beginning to creep back up, causing stress across the market for home buyers. 

The Federal Reserve is at war with inflation, with the next FOMC meeting coming soon and a CPI report showing inflation continuing to rise — economists are certain rates will continue to rise even higher. 

The monthly mortgage rate has drifted from $1,300 Average to almost $2,000 Average in the last 12 months as reported by Realtor.com

For the month of July onward look for the next FOMC meeting to conclude an even higher interest rate hike than the previous few that have incurred during the year thus far. 

What Does This Mean For Home Buyers Hoping To Purchase A Home? 
For those on the search for a good deal on a home of their choosing, let’s think back to Jerome Powell’s comments during the last FOMC Meeting — “I would say if you’re a homebuyer, or a young person looking to buy a home, you need a bit of a reset” Powell stated. Breaking down this statement, Powell believes that the next generation of home buyers need to wait for the ice to break and inflation to cool down.

That means higher rates, and less demand for homes effectively bringing down home values significantly. For first time buyers, & even seasoned homeowners looking for something new stay patient and consider waiting for a more appropriate time to make your next home purchase.