Mortgage rates are at a 21-year high. Here’s what that means for you.
VoxAPR 2023
Mortgage rates are becoming crippling high and the Fed is continuing to trap American homeowners and potential homebuyers as well as ignore the impact of increased interest rates on the housing market. Consumers don't want to buy a home with a 7% mortgage, while homeowners planning to sell their property don't want to swap their 3% loan for rates that are more than twice as high. The Fed's actions are weakening the housing market, yet officials seem set on digging the hole even deeper.
Despite rising mortgage rates — which do present a strain on potential homebuyers — the overall US economy is going strong and there is little chance of a recession. The battle against inflation was never going to be easy and some sectors of the economy have been hurt more than others. This pain will be short lived however as, once inflation comes under control, the Fed will lower interest rates, returning mortgage costs to normal, affordable levels.