July 27 Rate Hike – Lower Mortgages??
July 27th. They did it again. Fed Rate hike yesterday, July 26th. Let’s break that down for you. Why did they do it? Well, we know they’re trying to continue to lower inflation as they raise rates. We’ve watched inflation drop just a little bit. They’re trying to make things a little more affordable for the general population.
What impact does that hike have? Your credit cards are going to go up a little bit. Auto loans are going to go up a little bit. Home equity lines of credit and home equity loans, those rates are going up a little bit. How does that impact mortgage rates? No impact. They stayed the same. Matter of fact, they might even come down a little bit.
Why on earth when the Fed raises rates could a mortgage rate drop? Here’s why. The feds are trying to tame inflation. If you’ve heard anything I’ve said the last 18 months, you’ll know that mortgage rates follow inflation. We were prepared for this hike. That’s why rates didn’t go up. And we will potentially start to see mortgage rates drop just a little bit.
Finally, I almost fell out of my chair yesterday when a client told me that they recorded a seven and a half percent rate on a 30 year fixed. Folks, interest rates are not that high. If you have any questions about you or a client or friend, please reach out to anytime. Thanks.
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