Mortgage rates held steady this week at five-year high levels, while the the Federal Reserve held a policy meeting. Mortgage rates are up 120 basis points over the past 24 months.
At the meeting, chairman Jerome Powell stated that he is not anticipating "any unforeseen increases" in inflation. Zillow senior economist Aaron Terrazas explains that low inflation is key for the housing market in keeping rates in check, and the upcoming release of inflation data should be watched closely for its impact on the housing market.
The short-term interest rate targeted by the Fed are now 175 basis points higher than two years prior – the largest 24-month jump since 2007. The Fed’s longer-term projections suggested a steady pace of rate hikes over the coming two years, largely in line with market expectations.
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