Including comments from NAR’s Chief Economist, Lawrence Yun:
“Going in, there was about a 50/50 chance that they could raise rates by a quarter point. But, from my perspective, whether it was no change or a quarter increase, it really does not matter so much for the housing market or the mortgage rates because past experience shows that the long-term mortgage rates are driven by so many factors and the Federal Reserve short-term is just one of these. Things like inflationary expectation, budget deficit, global economy all have impact on the 30-year mortgage rates. Whether or not the rate change would have occurred today would not have mattered so much. I think what would be more important is how fast and for how long the rate increases when it first takes place. That is to say, is it going to be a cumulative from zero interest rate currently all the way up to 3% in two years, or is it going to be a more moderate pace of increase, because it is near-certain rates cannot remain at the zero level. It would need to be increased. My guess is that it is going to occur in December, but (it could) possibly occur early next year. Just as a final example, to give you one specific era worth noting, back in 2004, which is the last time the Federal Reserve decided to raise rates on a prolonged basis, the Fed raised their rates from o1% to 5.3%, yet over this same time period, mortgage rates moved from 5.8% to 6.3%. So keep that in mind, don’t be too excited over the Federal Reserve’s decisions.”