flexiblefullpage - default
Currently Reading

Rising Mortgage Rates Cripple Homebuyer Confidence

billboard - default

Rising Mortgage Rates Cripple Homebuyer Confidence

Prospective buyers are pulling out of the housing market in droves following the Fed's most recent rate hikes

June 23, 2022
Person stacking percentage blocks inside model home
Image: Stock.adobe.com

The Federal Reserve initiated its largest rate increase since 1994 last week, a 75 basis point gain exceeding all market expectations, according to Zillow. The Fed’s aggressive approach to cooling inflation is centered on first slowing the housing market, which is the largest driver of price growth throughout the country. The most recent rate hike pushed the University of Michigan consumer sentiment index to a record low, revealing the waning confidence of homebuyers even in an economy sustained by low unemployment rates. 

Rates were gradually increasing throughout the week, then shot higher on Friday with the Consumer Price Index release. The CPI report showed increasing inflation in May, rising from 8.3% in April to 8.6%, higher than market expectations. Markets reacted to this persistent inflation with a large selloff in both fixed income and equity markets as fears of more hawkish central bank actions and recessionary pressures drove risk-off sentiment.

Markets are beginning to show more concern that the Fed must take more aggressive actions to tame inflation, which would increase the likelihood of a recession as the economy slows down. Interest rates have continued to climb this week in front of the FOMC meeting today with markets expecting a 75 basis point rate increase.

Read more

leaderboard2 - default

Related Stories


Atlanta Urban Infill Project Innovates With Off-Site Methods

Clayton's CrossMod homes in Atlanta show how combining off-site construction with flexible urban zoning policies could move the needle for affordable housing


San Diego to Provide $15.4M in Gap Financing for Low-Income Apartments

The financing will help make five low-income housing projects financially feasible, providing 400 units, 96 of which will be for the formerly unhoused


Maryland Announces $400M Housing Bond to Support Affordable Homeownership

Maryland Governor Wes Moore announced news of the Maryland Department of Housing and Community Development's recent mortgage revenue bond—the largest in the agency's history

boombox1 -
native1 - default
halfpage2 -

More in Category

Get your sales and marketing teams together to create and deliver a consistent brand message from start to finish

Pundits may not agree on the timing nor the severity of the next economic downturn, but one thing’s certain: these 10 essential tactics will boost your business' efficiency, productivity, and profit

A closer look at what’s propelling the adoption of off-site construction methods in home building

native2 - default
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
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.