The Fed hikes and mortgages follow suit. This is known, predictable, and arguably intended.
The average rate on the 30-year fixed mortgage shot significantly higher Friday, rising 24 basis points to 4.95%, according to Mortgage News Daily. It is now 164 basis points higher than it was one year ago.
The housing market will be the first to feel the demand destruction of the rate hikes. And with more rate hikes on deck, there will be more demand destruction in housing to come.
The cure for inflation is always the same: recession. Only then do prices rebalance and reset.
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