the staff of the Ridgewood blog
Ridgewood NJ, Mortgage rates are soaring to levels not seen in nearly four years, and if they keep rising this quickly, we may see homes soon become out of reach for millions of families.
The 30-year fixed-rate mortgages have risen even higher, to 4.97 percent. Just last year, they were just under half that. That’s a one percentage jump over the last month alone. At its current rate, it could reach 5 percent before the end of the month. That’s the highest it’s been in decades.
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With inflation at a 40 year high and the Federal Reserve signaling multiple rate hikes around the corner, how much longer can the red hot real estate market stay hot, or even warm, for that matter.
Blake Harbin is the CEO of Houzzle Financial, a mortgage lending company in the Southeast. He has been a small business owner for more than two decades and is an expert in the real estate industry. Blake is also running as a candidate for Georgia’s 6th congressional district in 2022 and he shed some light on this subject.
Blake told us the only way to curb inflation and slow rising prices is by increasing interest rates. The Federal Reserve knows this, but it also knows that increased rates are counterproductive to economic growth. But instead of seeing a quarter-point bump or a rise of even half a percent, I think we’re looking at a whole percentage point. But this will barely scratch the surface in slowing down inflation. Unfortunately, it will be one of many quick interest rate hikes. We could be looking at all-time record-high hikes.
The highest the Federal Reserve has raised interest rates in the past were 20% in 1980, which was to fight double-digit inflation. That was the last year of President Jimmy Carter’s Term.
Blake also told us with all the interest rate increases we can expect a recession. Compounding things, we still have a supply chain problem.