“The real estate market is currently pretty crazy,” a local real-estate agent told NBC 7’s Kelvin Henry.
The U.S. Federal Reserve announced it will take a series of steps to slow the rate of inflation.
In March the Federal Reserve approved a .25% interest rate hike, the first hike since 2018. As a result of actions by the Federal Reserve, mortgage rates are spiking. The average rate on a 30-year fixed-rate mortgage is 4.72%.
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“In fact, that's quite a steep increase just over the course of, you know, less than three months, and so when interest rates go up then, of course, you know payments people have to make on the mortgages also increase, and that means that it becomes less affordable to enter the market,” UCSD Professor Allan Timmerman said.
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The increase in mortgage interest rates is causing some buyers to game plan for future home purchases.
“I have some, some pretty active buyers at the moment that are already anticipating, they’re trying to be more conservative about their budget,” San Diego Realtor Allan Uy said.
As a result of the interest rate hikes, some economists are lowering their home sales forecasts for 2022.
The Federal Reserve signaled that they will be raising the interest rate at each of the remaining meetings for the year.
