Fed Raises Rate: What It Means for Housing:  The Federal Reserve voted on Wednesday to raise its target short-term federal funds rate by a half-point. That marks the largest increase in the Fed’s rate in more than two decades and suggests higher mortgage rates will follow.  The Fed’s latest action looks to control inflation, which is running at a 40-year high. The federal funds rate, which is set by the central bank, is the interest rate banks use to borrow from and lend to one another. While mortgage rates are not directly tied to the Fed’s rate, they are often influenced by it.  The Fed’s latest action looks to control inflation, which is running at a 40-year high. As such, many economists say, mortgage rates will likely continue to keep climbing. Already, they’ve increased nearly 2 percentage points since just the beginning of the year.  The 30-year fixed rate mortgage averaged 2.96% just a year ago; this week, it averages 5.27%, Freddie Mac reports.  “Mortgage rates resumed their climb this week as the 30-year fixed reached its highest point since 2009,” said Sam Khater, Freddie Mac’s chief economist.  “While housing affordability and inflationary pressures pose challenges for potential buyers, house price growth will continue but is expected to decelerate in the coming months.”  After the Fed’s action on Wednesday, consumers likely will see changes to their borrowing and saving rates across the board, including higher credit card rates, car loans, student debt, and mortgages, economists say. 

The Impact of High Mortgage Rates:  The sharp rise in mortgage rates this year has added hundreds of dollars to new monthly mortgage payments.  In fact, climbing rates have caused the monthly amount of a new mortgage payment to increase by an average of $258.57. That equals an average of an extra $3,102.84 per year and an average of $93,085.20 over the lifetime of a 30-year loan.  APRs on the 30-year fixed-rate mortgage have jumped by an average of 1.46 percentage points across all 50 states since January, when the average APR was 3.79%. In April, it was 5.25%.  While mortgage rates are still low by historical standards, home buyers also are facing higher prices for homes. In the first quarter, 70% of the largest metros in the U.S. posted double-digit price growth in median single-family existing-home sales prices.

Is a Calmer Market Coming?:  Nationwide, The housing market is showing some early signs of normalizing. Contract signings dropped in March, the fifth consecutive month that pending home sales have fallen, the National Association of REALTORS® reported Wednesday. The Northeast was the only major region of the U.S. that saw a monthly increase in contract signings. All other regions dropped.  “The falling contract signings are implying that multiple offers will soon dissipate and be replaced by much calmer and normalized market conditions,” says Lawrence Yun, NAR’s chief economist. “As it stands, the sudden large gains in mortgage rates have reduced the pool of eligible home buyers, and that has consequently lowered buying activity. The desire to purchase a home remains, but the financial capacity has become a major limiting factor.”

Sellers May Nab Highest Price Premiums in May:  Home sellers may find the best opportunities to watch their profits peak this month, according to a new study from ATTOM Data Solutions, a real estate data firm.  The spring and summer months are the best times of year to obtain the highest home seller profits, according to ATTOM’s analysis, based on home sale trends over the past 11 years.  The months of May, June, and July offer seller premiums of 10% or more above market value.

Rainy Days Could Be Best for Home Showings:  Real estate pros say rainy days are actually the best circumstances to view homes.  A rainy day offers the potential to spot any water-related issues outside a home by watching how the water moves around a house.  Leaks in a ceiling, moisture in a basement, and mildew smells are heightened on a rainy day.