Another Rate Hike?

In a bid to combat inflation, earlier this summer the Federal Reserve instituted historic rate hikes. In the real estate market, available homes for sale dipped a bit and current homes on the market took a few days longer to sell. That was not enough, it seems, as the Fed is now expected to order yet another rate hike. 

As shared by National Public Radio (NPR), the Fed has been boosting borrowing costs at the fastest pace in decades. But so far, its actions have done little to curb the rapid run-up in prices. Consequently, markets are projecting that interest rates might jump another 0.75 percentage points. 

How This Hits Home

The housing market is feeling the effects. Mortgage rates have soared to the highest level since 2008, and as a result home sales are slowing, which also cuts demand for furniture, appliances and landscaping.

“Inflation is still running hot and is not easing as fast as expected,” said Greg McBride, chief financial analyst for Bankrate.com. “The Fed will continue to hike rates until it actually restrains the economy and intends to keep rates at those restrictive levels until inflation is unmistakably on its way to 2%.”

This doesn’t only spell bad news, though. Most Americans remain optimistic as they expect prices to stabilize over the next few years.