Instant Reaction: Lawrence Yun on Today’s FOMC Statement and 2018 Outlook for Mortgage Rates

The following is NAR Chief Economist Lawrence Yun’s reaction to the Federal Reserve’s decision today not to raise short-term rates, as well as how monetary policy the rest of the year will influence mortgage rates:

“The Fed will not be on standby for the remainder of the year. A total of three short-term rate hikes are likely. The series of rate hikes will nudge up mortgage rates, though not in one-to-one fashion. Moreover, the Fed’s quantitative un-easing of selling the bonds and mortgage-backed securities into the market (after having purchased in the recent past years) will also force up longer-term interest rates, including mortgage rates. Expect mortgage rates to reach 4.5% by the second half of the year.”