Rising rates may not normalize the housing market, but they may help inflation
- Record high home prices aren’t going away, even with rising rates. However, the rising rate environment will prevent a significant amount of money from entering the economy.
- With nearly full employment, the Fed is hyper-focused on price stability — the other half of the Fed’s dual mandate — which means higher mortgage rates through the rest of the year.
- Demand is softening slightly now that the average mortgage rate jumped 2% in the past four months.
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