In view of the Federal Reserve’s decision to raise interest rates yesterday, home price growth is expected to slow, reports Lawrence Yun, chief economist for the National Association of Realtors.
“The era of super-low mortgage rates is over and consumers will face higher interest rates over the next two years. Another rate hike by the Fed is almost certain before year’s end, along with three further rounds of increases in 2019,” said Yun. “These interest rate increases are occurring for good reason: an improving economy. Therefore, home sales should hold steady as the opposing forces of higher rates and more jobs neutralize each other. Home price growth will surely slow, however, as higher interest rates limit the stretching of the homebuyers’ budget.”