The Covid-19 pandemic brought on chaos within the U.S. housing market, with costs skyrocketing, inventories dwindling and intense bidding wars.
Then got here file inflation, which drove the worth of all the things increased.
The U.S. Federal Reserve, although, is waging an intense combat in opposition to rising costs, utilizing rates of interest as its main weapon.
A aspect impact of elevating rates of interest, although, is increased mortgage charges.
What’s extra, the Fed now owns $2.7 trillion of mortgage bonds, a part of its plan to prop up the monetary system when Covid first began. And it started promoting them in June.
So what does the Fed’s combat in opposition to inflation imply for the red-hot housing market? Watch the video above to seek out out extra about how the Fed’s rate of interest instruments have an effect on the housing market, and the way the Fed plans to unload the trillions of {dollars} value of mortgage debt on its stability sheet.
