Economy

Thanks Biden! Mortgage Rates Skyrocket Above 6%


For several years the Federal Reserve kept its base interest rate extremely low, allowing millions of Americans into the real estate market, driving up the average home price.

Now that inflation is out of control, the fed is going to dramatically increase its rate, which will affect anyone who has an adjustable mortgage, credit card, auto loan, etc.

Mortgage rates just surge well Into the 6% range after one of the worst days in decades.

Rates are up from last week’s rate of 5.44 percent.

The Fed Funds Rate doesn’t directly set mortgage rates, but movement in Fed rate hike expectations does tend to coincide with movement in mortgage rates.

Mortgage News Daily says Mortgage Rates Surge After One of The Worst Days in Decades

“Margate It’s hard to quantify just how bad today was for mortgage rates because there’s no quality day-over-day mortgage rate data from before 2009 (when we created our own).  In that time, there has only been one other comparable day to today in terms of the jump in mortgage rates.”

“As a fan of the whole truth, I feel compelled to say that there were a few days in March 2020 that were bigger, but I’m not counting them as comparable days because they were the product of TWO-WAY volatility and a once-in-a-lifetime combination of market conditions and Fed policy response.”

“That leaves July 5, 2013 as the only truly comparable day.  It too came at a time when rates had already been rising rapidly in response to an evolving outlook for Fed policy.  The difference back then was that the Fed had simply decided it was time to finally begin unwinding some of the easy policies put into place after the Financial Crisis. 

The Fed finally woke up and realized runaway inflation is taking place.  Specifically, the market that’s panicked about the Fed’s potential panic at the upcoming meeting and policy announcement set to be released at 2 pm on Wednesday afternoon.”

The Federal Reserve began a two-day policy meeting on Tuesday and is scheduled to announce its decision on interest rates on Wednesday at 2 p.m. The market-implied odds of a 75 basis point hike have soared to 90 percent, up from just 4 percent a week ago.

See also  3 Men On Deserted Island Get Rescued After Spelling 'Help' With Palms

This rapid shift in expectations has come after Friday brought news of record-high inflation in the Consumer Price Index and rising inflation expectations in the University of Michigan’s survey of consumers. On Monday, the Federal Reserve Bank of New York released its survey of consumers for May.

This also showed rising inflation expectations. The Producer Price Index released Tuesday showed inflation accelerating on a month-to-month basis.

The Federal Reserve does not directly control mortgage rates. Instead, it targets the overnight lending rate for banks and pays interest on overnight reserve levels. Longer-term interest rates reflect the expected path of short-term rates over time. Mortgage rates, in turn, tend to reflect the direction of long-term rates, especially the yield on 10-year Treasury bonds.

I will be keeping my eyes on how fast homes, in certain markets, continue to sell.

Global investors, funded by Blackrock Financial, have been buying up single-family homes as cash deals, pushing out first-time buyers, and driving up housing costs.

As the skyrocketing interest rates will now prevent millions of Americans from being able to get qualified for the prices of these inflated homes, the corporate investors will have less competition, allowing them to stop overpaying for single-family homes, in order to win competitive bids.

Sponsors

PureTalk – Save Big Money On Your Cell Phone Bill  

GOLDCO – FREE 2022 Wealth Protection Kit

MYPILLOW – Save Up To 66% On MyPillow Products – Use Promo Code – FTR   

Continue Reading
You may also like...

Conservative independent talk show host and owner of https://FinishTheRace. USMC Veteran fighting daily to preserve Faith - Family - Country values in the United States of America.

Comments

More in Economy

Subscribe to our newsletter!

Awesome Deals On MyPillow.com Products https://MyPillow.com/FTR (Promo code "FTR")

Download My Podcasts Below

Eric Thompson Show Podcast