flexiblefullpage - default
Currently Reading

The Fed Ups Its Pressure on the Housing Market, Amplifying Recession Fears

Advertisement
billboard - default
Market Data + Trends

The Fed Ups Its Pressure on the Housing Market, Amplifying Recession Fears

The Federal Reserve raised the 30-year fixed-rate mortgage yet again on Wednesday, and with more gains expected in the months ahead, housing experts warn a recession could soon follow


September 23, 2022
Person standing on balance beam holding home and car with percentage balloon on opposite end
Image: Stock.adobe.com

In keeping with its consistent and aggressive rate hikes meant to cool runaway inflation in the U.S. economy, the Federal Reserve raised the federal funds target rate by 75 basis points on Wednesday, and according to NAHB, rates could remain elevated for a substantial period of time. By the end of 2022, the federal funds rate is expected to top 4.8%, and that could send the average 30-year fixed mortgage rate beyond 6.5% in the final months of the year.

As higher interest rates quell home purchasing activity nationwide, the current monetary policy path points toward a likely recession, which experts say may be the only solution to rebalancing a turbulent market. 

The current monetary policy path all but guarantees a mild recession, along with a notable rise in the unemployment rate. In fact, the Fed is risking an overshoot given the lagging contributors of inflation, such as rent, which will show gains in the data several months after the actual economy has stalled. The Fed’s current path is thus overly hawkish, particularly given the previous two quarters of declining GDP. 

Read more

Related Stories

Market Data + Trends

High Home Prices and Rents Cause Investor Pullback, Giving Homebuyers a Chance

As professional investor activity in the residential housing market slows, homebuyers may enjoy less competition for available homes

Demographics

Why Millennials Still Trail Behind Baby Boomers in Today’s Housing Market

Millennials are losing out to Baby Boomers in the hunt for a limited supply of starter homes

Market Data + Trends

A Tale of Two Extremes: NYC For-Sale Market Stalls While Rental Market Booms

As housing costs reach new highs, New York City buyers are flooding an already supercharged rental market

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category



Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.