Kate Padilla

Well, friends, we knew the honeymoon wouldn’t last forever. We’ve been enjoying these low interest rates for many years, with no end in sight since the end of 2018, but these days are coming to a close.

Back in December, news came out that the Fed expected three rate hike increases in 2022, I was saying I expected four. Once per quarter. However, CNBC reported yesterday that not only had the first rate hike been approved — an increase of 0.25% — but six more were expected yet this year.

While Fed rates aren’t directly tied to mortgage rates, we already know that mortgage rates are rising. A 30-year, fixed-rate mortgage is now around 3.85%, 0.09% higher than it was last week. But the Fed rates are tied to other types of debt, including credit card debt and HELOC, both of which can affect a buyer when they are applying and in the process of obtaining a mortgage.

But these rate hikes will likely affect the housing market in other ways as well. According to Mike Simonsen, with Housing Wire, this first interest rate hike may not affect the housing market very much (given the current demand in many markets across the country), but as these market increases continue through the year and buying a house becomes more expensive, demand may slow down and sellers may not see their houses vanish off the market as quickly, or for as much money.

There is still so much speculation of what is happening, and what could happen in the future. And, as we all know, there are no guarantees. But for those looking to buy a house, or sell a house, in the next year or two, having the information and framing expectations accordingly can help ease some uncertainty and help create a clear path toward the best possible outcome.