The end of 2022 provided slight relief from some of the worst predictions on interest rates. After a rocky fall that pushed rates over 7% temporarily, the December rate hike of 0.5% by the Federal Reserve was expected and inflation data showed minor moves in the right direction. The Fed has made clear they are not done raising interest rates, as inflation has proved stubbornly immune to their monetary policy thus far.
It is still widely believed they will continue their rate hikes in Q1 of 2023 as Fed Chair Powell and other officials have consistently stated. However, it’s important for buyers to know the Fed does not directly dictate interest rates for mortgages, credit cards, or auto loans. The Fed simply sets the floor at which banks can exchange funds. Of course, a higher cost of funds for banks trickles down to higher interest rates for borrowers, and that is the reality buyers are now facing.
Moving into the new year, it’s important for buyers to feel confident in their ability to borrow. Lenders are offering a variety of options to help buyers weather this high-rate environment with a payment they feel comfortable with until inflation subsides and rates begin to come down. The days of 3% mortgages are most likely gone forever, but buyers need not be scared out of the market completely. An expert agent and seasoned lender will prove crucial for buyers in 2023.
To get in touch, reach out to your Helen Adams Realty agent or contact Tom Baker directly.
About Introlend Carolinas
IntroLend Carolinas is a mortgage marketplace that allows you to compare all of your options side by side, giving you the confidence to know you are receiving the best possible rate and terms. Helen Adams Realty has dedicated finance managers in their offices who have been in the mortgage and customer service industries for decades and understand how to take great care of any type of borrower in any type of scenario.