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Mixed Signals: Inflation Slows, Fed Cautious About Rate Hikes as U.S. Home Prices Face Uncertainty Feature Image
Posted on July 25, 2023 4 minute read

Mixed Signals: Inflation Slows, Fed Cautious About Rate Hikes as U.S. Home Prices Face Uncertainty

What's in this article?

Latest average U.S. Mortgage Rates 2023-07-20
Another rate hike is on the horizon
U.S. home prices’ ten-year rally could be at an end—Robert Shiller
Attom’s snapshot of the U.S. real estate/housing market

Another rate hike looms despite indications that inflation is slowing down—and we show you why. 

The rise in home prices could finally be coming to an end according to a Yale professor, and we look at some of the newest key data points about the housing market in today’s Homefinity real estate and mortgage rates news roundup. 

Latest average U.S. Mortgage Rates 2023-07-20

  • 30-year fixed: 6.78% (previous week: 6.96%)
  • 15-year fixed: 6.06% (previous week: 6.30%)
  • 30-year FHA index: 6.814% (previous week: 6.697%)
  • 30-year fixed rate Jumbo index: 7.103% (previous week: 6.998%)

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Another rate hike is on the horizon

According to a report today from Reuters, the Federal Reserve is considering another interest rate hike, but recent economic data has complicated their decision-making. 

Inflation has slowed—so why the hike? 

Inflation has slowed down towards the Fed’s 2% target, leading some analysts to believe that further rate increases may not be necessary. 

However, the optimism of a ‘soft landing’ scenario, where inflation falls, unemployment remains low, and a recession is avoided, has buoyed financial markets, possibly undermining the central bank’s goals.

Despite the recent deceleration in inflation, the Fed is reportedly cautious about declaring victory too soon and—moreover—avoid being misled by the data and therefore are prepared to keep their options open for future rate increases. 

The general impression is that financial markets have already anticipated the Fed’s actions, easing credit conditions and potentially stimulating growth.

U.S. home prices’ ten-year rally could be at an end—Robert Shiller

Robert Shiller, a distinguished economics professor at Yale University, has suggested that the remarkable decade-long surge in U.S. home prices may ultimately cease once the Federal Reserve concludes its rate-hiking cycle. 

According to the S&P CoreLogic Case-Shiller U.S. National Home Price Index, home prices have experienced consistent growth since 2012. 

Shiller recently shared his insights with CNBC’s “Squawk Box Asia,” highlighting the impact of the fear surrounding interest rate hikes on people’s decisions. 

Homeowners and prospective buyers alike have been compelled to act in anticipation of rising interest rates, fueling market activity positively. However, Shiller cautioned that this trend is reaching its culmination.

Attom’s snapshot of the U.S. real estate/housing market

Attom, a CA company that specializes in housing data, just released its report on a bird’s eye view of the overall housing market and foreclosure stats in the country.

In the last year, they say, a staggering 5,165,655 residential properties have changed hands in the vibrant U.S. real estate market. During this same period, the median home sales price for single-family homes and condos has settled comfortably at $350,000—a steady upward climb by 10 percent each quarter, propelling the national median home price to new heights.

Latest foreclosures data

Over the past six months, Attom says there have been 185,580 properties with foreclosure filings, which include default notices, scheduled auctions, or bank repossessions. 

This represents a 13 percent increase compared to the same period last year and a staggering 185 percent increase compared to two years ago.

How does this compare to the situation in 2022? In their mid-year 2023 U.S. Foreclosure Market Report, they revealed that a total of 135,065 U.S. properties initiated the foreclosure process in the first half of 2023. 

This reflects a 15 percent increase from the first half of 2022 and a 36 percent increase from the first half of 2020.

That’s it for this week! Keep checking back to Homefinity’s Blog for the latest in the mortgage rate and real estate market news. And if you want to learn more about what your mortgage options are, reach out to Homefinity, and let’s take a look at your housing future.

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