The Fed has given some hope to homebuyers by declining to raise the federal funds rate, a key overnight bank lending rate at its January meeting. Although the Fed rate and mortgage rates move independently, the same market factors drive the rate increases and cuts.
Inflation, job growth and the overall economic outlook impact lenders and how they set rates. A steady Fed rate should translate to fewer increases in mortgage rates. However, availability and affordability may still be obstacles when shopping for a home. In its statement, the Federal Open Market Committee (FOMC) said, "The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent" and that "the Committee remains highly attentive to inflation risks."
Factors squeezing buyers
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Inflation is receding and rates have come down slightly
Related Content
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
-
How to Help Your Kids Without Ruining Your RetirementHere are some general considerations to ensure the gift of assets to your kids will not negatively affect your financial future.
-
AI to Power the Next Generation of RobotsThe Kiplinger Letter There's increasing buzz that the tech behind ChatGPT will make future industrial and humanoid robots far more capable.
-
How Retirees Can Downsize In Today's Housing MarketRising prices, higher interest rates and a tight supply of smaller homes present challenges. But retirees have an edge.
-
Five Housing Markets On the RiseStudy shows homes in five markets are going under contract in less than two weeks, despite a broader national housing market slowdown. Which cities are bucking the trend and why?
-
House Hacking: Make Money Off Your HomeHouse hacking involves renting out a part of your residence to create passive income. Here's how it works.
-
Steep Mortgage Rates Stunt Home Buying PowerThe high-rate environment of today’s housing market leaves potential homebuyers with less purchasing power than last year, study shows.
-
Monthly Housing Payments Hit All-Time High, Study ShowsMonthly housing payments hit an all-time high in September, a report from Redfin shows, reflecting the multi-decade high for mortgage rates and continued rise in home prices.
-
When Renting Is Smarter Than Buyingreal estate There are some situations when renting is smarter than buying. You're not necessarily throwing your money away when you rent.
-
Find the Best 30-Year Mortgage Rates30-year mortgage rates — check out the best here.
-
Best Time of Year to Buy A HouseYou may find a good home deal at any time of year, but certain seasons or even months have the perfect blend of inventory, supply and price. Here's when to look.
