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Mortgage interest rates inched upwards and closer to the 52-year average (7.74% since 1971) by hitting 7.57% this week. While some may remember a time when rates were higher, home prices then were also considerably lower and more on par with income. The current mortgage rate means a $2,253 monthly payment for a $400,000 home.
This week at the National Association for Business Economics, listening to a keynote by The Fed’s Vice Chair Philip Jefferson, it was clear that attention is on the bond, mortgage, job market, and CPI. However, watching data does not mean action. There has been no timeline provided for a reversal in Fed policy. Data needs to be considered in real time when making decisions.
For now, buyers who are ready to buy will factor in higher rates and less competitive demand when home shopping. When rates do lower, substantial pent-up demand will be on tap.
