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Special Report

Housing Market Research Brief

June 2022

Early Signs of Housing Price Recalibration as
Higher Interest Rates Stunt Affordability

Prospective buyers deterred by decade-high mortgage rates. The Fed increased its overnight rate for a third time this year in mid-June to a target range of 1.50 to 1.75 percent, an aggressive response to persistent inflation as the Consumer Price Index climbed at its fastest pace in over 40 years in May. The Fed messaged its intent to continue lifting rates to temper inflation in the coming months, likely sustaining upward pressure on the cost and criteria to obtain a home mortgage. The average rate for a 30-year fixed-rate mortgage in the U.S. soared to 5.8 percent in the second half of June, up more than 250 basis points from the start of this year and the highest register since 2008. With home prices still at historic levels, this has presented another hurdle for potential buyers, leading to a notable slowdown in sales activity.

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