Fed Hikes Rates: How does this Affect the Housing Market?

The Federal Reserve just raised the federal funds rate by 50 basis points. Does this mean that home mortgage rates will increase by 1/2% or is this already priced in? The federal reserve is trying to slow economic growth without putting us into a recession while at the same time cooling off the housing market.

This fed rake hike is the largest in over 20 years, and not likely to be the last. Mortgage interest rates have already climbed over 2% in the last couple months and it is likely to climb through the rest of the year into early 2023. Current predicted fed policy is to keep interest rates high and then start reducing interest rates in early 2023 to keep the economy out of recession. Its possible the fed could lower interest rates or other measures like quantitative easing if the economy goes into a recession.

The housing market is affected by interest rate increases, as less people can qualify to purchase a home.

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