08/03/2022
"๐ง๐ต๐ฒ ๐๐ฒ๐ฑ ๐ท๐๐๐ ๐ต๐ถ๐ธ๐ฒ๐ฑ ๐บ๐ผ๐ฟ๐๐ด๐ฎ๐ด๐ฒ ๐ฟ๐ฎ๐๐ฒ๐!!!" ๐ฒ
๐ (๐๐ฐ๐ฏ'๐ต ๐ฑ๐ข๐ฏ๐ช๐ค, ๐ต๐ฉ๐ช๐ด ๐ช๐ด๐ฏ'๐ต ๐ต๐ณ๐ถ๐ฆ!) ๐
Many people confuse increases in the fed funds rate made by the Fed with an increase in mortgage rates. ๐๐ผ๐๐ฒ๐๐ฒ๐ฟ, ๐๐ต๐ฒ๐ป ๐๐ต๐ฒ ๐๐ฒ๐ฑ ๐ฟ๐ฎ๐ถ๐๐ฒ๐ ๐ฝ๐ผ๐น๐ถ๐ฐ๐ ๐ฟ๐ฎ๐๐ฒ๐ ๐ถ๐ ๐ฎ๐ฐ๐๐๐ฎ๐น๐น๐ ๐๐๐๐ฃ๐ฆ ๐บ๐ผ๐ฟ๐๐ด๐ฎ๐ด๐ฒ ๐ฟ๐ฎ๐๐ฒ๐ ๐ถ๐บ๐ฝ๐ฟ๐ผ๐๐ฒ!
Why is that? ๐ค
โ
The simple answer is that the Fed rate hikes will slow down the economy and hopefully curb inflation, and inflation is actually what drives rates higher. As markets anticipate the Fed will have to raise rates, mortgage rates do move higher, but months in advance of actual rate hikes. Once the Fed actually raises rates, we often see mortgage rates improve slightly afterwards.
๐๐น๐๐ต๐ผ๐๐ด๐ต ๐ถ๐ ๐ถ๐ ๐ฎ ๐ฏ๐ถ๐ ๐บ๐ผ๐ฟ๐ฒ ๐ฐ๐ผ๐บ๐ฝ๐น๐ฒ๐
๐๐ต๐ฎ๐ป ๐๐ต๐ฎ๐, ๐๐ต๐ฒ ๐บ๐ฎ๐ถ๐ป ๐๐ฎ๐ธ๐ฒ๐ฎ๐๐ฎ๐ ๐ต๐ฒ๐ฟ๐ฒ ๐ถ๐ ๐๐ต๐ฎ๐ ๐ ๐ข๐ฅ๐ง๐๐๐๐ ๐ฅ๐๐ง๐๐ฆ ๐๐๐ ๐ก๐ข๐ง ๐๐๐ง ๐ช๐ข๐ฅ๐ฆ๐!
In fact, the rates you have access to may even have improved.
๐๐ณ ๐๐ผ๐'๐ฑ ๐น๐ถ๐ธ๐ฒ ๐บ๐ฒ ๐๐ผ ๐๐ฎ๐ธ๐ฒ ๐ฎ ๐น๐ผ๐ผ๐ธ ๐ฎ๐ ๐๐ผ๐๐ฟ ๐๐ถ๐๐๐ฎ๐๐ถ๐ผ๐ป ๐ฎ๐ป๐ฑ ๐๐ฒ๐ฒ ๐๐ต๐ฎ๐ ๐ฟ๐ฎ๐๐ฒ๐ ๐ฎ๐ฟ๐ฒ ๐ฎ๐๐ฎ๐ถ๐น๐ฎ๐ฏ๐น๐ฒ ๐๐ผ ๐๐ผ๐, ๐ฟ๐ฒ๐ฎ๐ฐ๐ต ๐ผ๐๐ ๐ฎ๐ป๐๐๐ถ๐บ๐ฒ. ๐'๐ฑ ๐น๐ผ๐๐ฒ ๐๐ผ ๐ต๐ฒ๐น๐ฝ ๐๐ผ๐.
