The demise of three banks last week has been sending shockwaves through an already fragile economy. Could it have an impact on real estate, too?
“The Silicon Valley Bank failure, along with a few other banks, means that the Federal Reserve cannot be so aggressive in raising its short-term interest rates,” says Lawrence Yun, chief economist of the National Association of REALTORS®. “Therefore, mortgage rates will decline.”
Mortgage rates had been steadily rising in recent weeks, with the 30-year fixed-rate loan averaging 6.73% last week, according to Freddie Mac. The Fed has been making a series of aggressive rate increases, which may indirectly influence mortgage rates, over the last few months. Home buyers have been up against affordability woes, as mortgage rates are nearly double what they were just a year ago.