{"id":1448,"date":"2022-07-28T13:12:15","date_gmt":"2022-07-28T17:12:15","guid":{"rendered":"https:\/\/www.realtyhop.com\/mortgage-center\/?p=1448"},"modified":"2023-07-22T13:35:57","modified_gmt":"2023-07-22T17:35:57","slug":"fed-rate-hike-july-2022","status":"publish","type":"post","link":"https:\/\/www.realtyhop.com\/mortgage-center\/fed-rate-hike-july-2022\/","title":{"rendered":"The Impact of the Fed\u2019s Latest Hike on Mortgage Interest Rates"},"content":{"rendered":"

On Wednesday, the Federal Reserve raised interest rates by 75 basis points to a range of 2.25% to 2.5%. The range was previously 1.5% to 1.75% before the Fed announced the latest increase and was only 0% to 0.25% until the Fed began a series of rate increases in March, May, and June.\u00a0<\/span><\/p>\n

The Federal Reserve\u2019s hike applies to overnight interest rates, or the interest that banks charge one another for overnight loans. The Fed raised interest rates by 75 basis points in back-to-back months, as there was also an equivalent 75 basis hike in June. There hasn\u2019t been such a quick rate acceleration since the 1980s, making the latest Fed move historic.\u00a0<\/span><\/p>\n

When Fed Chair Jerome Powell announced the latest rate hike in a press conference, he said that the United States isn\u2019t in a recession and that his latest decision wouldn\u2019t move the U.S. towards one. The Chairman cited strong employment growth \u2014 <\/span>Burea of Labor Statistics (BLS) data<\/span><\/a>\u00a0shows that the U.S. has added at least 368,000 jobs per month in 2022.\u00a0\u00a0<\/span><\/p>\n

The Federal Reserve, in an official statement, also defended its latest rate hike \u201cRecent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low.\u201d They also mentioned that\u00a0<\/span>high inflation<\/span><\/a>\u00a0is evidence of \u201csupply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.\u201d<\/span><\/p>\n

However, many experts in the private sector aren\u2019t quite as optimistic about the state of the economy. \u201cWhether the economy can smoothly transition from allegro to adagio is very much in doubt and depends both on the current state of the economy and how the Fed conducts policy from here,\u201d David Kelly, chief global strategist at JPMorgan Asset Management,\u00a0<\/span>told CNN<\/span><\/a>.\u00a0<\/span><\/p>\n

The Impacts of the Fed\u2019s Move on Mortgage Interest Rates<\/span><\/h3>\n

The Federal Reserve\u2019s rate and mortgage interest rates are correlated to a large extent, but there is no evidence that mortgage interest rates will increase based on the latest news from the Fed. While that may not make sense to the casual observer, Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), has a simple explanation.\u00a0<\/span><\/p>\n

\u201cThe long-term bond market, off of which mortgage rates are generally priced, has mostly priced-in all future actions by the Fed and may have already peaked with the 10-year Treasury shooting up to 3.5% in mid-June,\u201d\u00a0<\/span>said Yun<\/span><\/a>.\u00a0<\/span><\/p>\n

Yun also said that mortgage interest rates \u201cmay be topping or very close to a cyclical high in July\u201d and that \u201cit is possible that the 30-year fixed mortgage rate may settle down at 5.5% to 6% for the remainder of the year.<\/span><\/p>\n

As of July 28th, interest rates on a 30-year fixed-rate mortgage sit at a national average of 5.30%, according to\u00a0<\/span>Freddie Mac<\/span><\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

On Wednesday, the Federal Reserve raised interest rates by 75 basis points to a range of 2.25% to 2.5%. The range was previously 1.5% to 1.75% before the Fed announced the latest increase and was only 0% to 0.25% until the Fed began a series of rate increases in March, May, and June.\u00a0 The Federal […]<\/p>\n","protected":false},"author":3,"featured_media":1450,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[7,8],"tags":[],"class_list":["post-1448","post","type-post","status-publish","format-standard","has-post-thumbnail","category-mortgage-rates","category-news"],"yoast_head":"\nThe Impact of the Fed\u2019s Latest Hike on Mortgage Interest Rates - RealtyHop Mortgage Center<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realtyhop.com\/mortgage-center\/fed-rate-hike-july-2022\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Impact of the Fed\u2019s Latest Hike on Mortgage Interest Rates - RealtyHop Mortgage Center\" \/>\n<meta property=\"og:description\" content=\"On Wednesday, the Federal Reserve raised interest rates by 75 basis points to a range of 2.25% to 2.5%. 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