How did the mortgage market react to the 11th Fed rate hike?

King Street in Charleston, SC | mortgage rate news

Fed raises interest rates for the 11th time since March 2021

As experts predicted, the Federal Reserve raised interest rates a quarter of a point on Wednesday. The most recent rate hike has pushed the federal funds target interest rate to 5.25%-5.50%, a 22-year high.

The good news is that the Fed signaled that it may have reached the peak of the current interest rate hike cycle.

How did mortgage rates react to the news? The national average for a 30-year, fixed-rate mortgage ended down 0.09% to 6.95%*. According to experts, today’s hike was already fully priced in at the end of May, and the news didn’t come as a shock to the market.  

When asked for comment on whether the latest rate hike will impact the mortgage market, Al Faber, a senior wealth manager at Woodson Wealth Management, said, “A 25 bps hike should not meaningfully impact mortgage rates.”

Has the Fed frozen home prices?

The mandate the Federal Reserve maintains is two-fold. First, they want to fight inflation, and second is to maintain price stability. Those two goals often go hand-in-hand, but nowhere are they more evident than the housing market. Has the Federal Reserve managed to live up to its goals when it comes to the housing market? There’s a case to be made that the answer is ‘yes’.

Housing prices have stayed higher than they were pre-pandemic, and that’s been one of the stickier aspects of the current inflationary period. However, while some markets have seen volatility, the housing sector overall hasn’t moved much in the past year.

Fed Chairman Powell stated that homebuyers needed a sort of ‘reset’ in June 2022. Since then, the Fed has continued to raise interest rates, and home prices have actually fallen 0.5% between May 2022 and May 2023, so a case can be made that the Fed’s actions have worked to bring price stability and curtail inflation in the housing sector.

Has Apple lived up to its commitments for housing in California?

It’s been almost four years since Apple announced it would commit $2.5 billion to help solve California’s housing crisis. Has the tech giant lived up to its commitments? Since the 2019 pledge, Apple has spent $1.5 billion of its committed funds. According to Apple, those funds have provided affordable housing access and services to almost 40,000 people in California.

While the housing commitments has helped the Bay Area, there’s still $1 billion that hasn’t been committed, and Apple has yet to provide a timeline for the next round of funding.

According to Kristina Raspe, Apple’s VP of Global Real Estate, “It’s really about finding the projects where we can make a huge difference, where our impact is going to be the difference between something happening and something not happening.”

* National average rates accurate as of 7/26/23 from and are not advertised rates from Guaranteed Rate.

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