The Federal Reserve hiked interest rates last week for the eighth time in less than a year, pushing the benchmark rate to its highest level since 2007.
That would seem to be bad news for a mortgage market that has seen demand slip amid higher financing costs.
But as Nadia Evangelou, senior economist at the National Association of Realtors, explains, the most recent increase signals there could be a light at the end of the rising-rate tunnel.
Fed Chair Jerome Powell approved a 25 basis point hike, down from the 75 basis point increases instituted through much of 2022 and below the 50 basis point bump he okayed in December.
That slowing pace signals that the rate raises are working, inflation is cooling and the Fed could pause increases sometime soon.
“We saw that mortgage rates fell this week, demonstrating that the market had likely already priced in the recent hike,” said Evangelou, pointing to rates that fell below 6 percent for the first time since September.
“In fact, we expect mortgage rates to continue that downward track,” she added.
Listen in for the lowdown on what the most recent hike means for home prices, sales volume and mortgage demand. Tune into the full episode on Apple Podcasts, Spotify, Audible or wherever you get your podcast fix.