Buying a home continues to be unaffordable for many Americans, with the median sales price of a home climbing 10.8% from one year ago to $403,800, though that figure was down $10,000 from June’s record high of $413,800. The average rate on a 30-year fixed-rate mortgage also jumped back over 5% last week, according to data from Freddie Mac. A recent survey by The Balance found that of those who were considering buying a home in the next year, 78% have decided to delay because of high prices. Some potential buyers have even backed out of buying a home due to increased costs. As the Federal Reserve raises interest rates to combat inflation, mortgage rates will likely continue to rise along with them, as borrowing costs climb for a wide range of loans. Yesterday, the Federal Reserve released minutes from its July meeting, which showed that more interest rate hikes will likely happen in the future. But rate increases won’t continue forever—policymakers stated that they might slow down the pace of rate hikes, depending on how they affect inflation and the economy. Already, trader expectations on how high the Fed will raise rates at its next meeting in September are shifting in favor of a lower hike of 50 basis points compared to the recent hikes of 75 basis points, according to CME Group’s FedWatch Tool, which is based on fed funds futures data.
