Does a Federal Rate Hike mean a Mortgage Rate Hike?

Real Estate Agent with Joy Daniels Real Estate Group, Ltd.


A big thank you to John Meussner with Mason-McDuffie Mortgage, an amazing lender that I met years ago on Active Rain and have had several great interactions.  I realized that you can teach an old dog new tricks because I learned so much from John about Federal Rate Hikes and mortgage interest rates!

December is over, but December did have several Federal Rate Hikes!  After all the commentary, rates actually improved!  We have seen rates go from the 8's at their worst back in October down to the mid to low 6's!  Which means more buying power for Buyers!

There's a huge misconception that the Fed raises mortgage rates - they do NOT!  In realty, mortgage rates often move in the opposite direction of Federal Funds rates.  The Fed changes the rate that banks borrow from each other.  This DOES pressure rates up, BUT . . . it also typically causes a recessionary environment and slows inflation, which ends up forcing mortgage rates DOWN!

The realty is, rates have improved a lot since the Fed started raising rates!  2021 is shaping up to a year where real estate will be very local.  Almost every market under the sun saw a steep appreciation in the last few years.  John said home prices will go up about 4% over the next year, following 10% year over year gains to date.  14% over 2 years is more than my retirement accounts!  

Real Estate is really a good bet for those concerned about getting a return on investment.  If rates continue to trend lower in the tight inventory market, 2023 could be one of the best bets out there for real estate!



Posted by


Joy Daniels, GRI, ABR, CSP, e-PRO
2793 Old Post Road, Suite 200
Harrisburg, PA  17110

(717) 695-3177  office - Call TODAY and let me help you find your dream home! - Email TODAY and let me help you find your dream home!

What is your home worth?  Find out at MLS Market Snapshot

  facebook icon   Goolge icon twitter icon  linked in  youtube icon


Comments (8)

Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Northwest Tennessee Realtor

I think today the 30 yr rate is about 6.75% which is going up and down close to that.

Jan 02, 2023 02:39 PM
Sean Gilliam
LoKation Real Estate - Longmont, CO
Real Estate on the Front Range

Good explanation, in layman's terms, of how the fed rate moves differently from mortgage rates. 


Jan 02, 2023 02:50 PM
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

I hope it will stabilize between 5-6%. The economy seems to be good for now, I see no reason why to drop it a bit to make homebuyers to feel more excited about the housing market. 

Jan 02, 2023 02:56 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Joy, I just wanted to stop in and wish you a very Happy and Prosperous 2023 Endre

Jan 02, 2023 03:07 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello and Happy New Year, Joy - it's always good to "see" you on the AR blog roll.  As far as teaching old dogs new tricks, John Meussner has a history of making things happen.  I am glad that is true for you as well.  

Jan 02, 2023 04:22 PM
Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

It is strange but true Joy at least in the recent short run. However, over time as the FED RATE goes up the mortgage rates will likely go up also.

Jan 02, 2023 04:43 PM
John Meussner
Mortgages in AZ, CA, CO, DE, FL, GA, IN, MD, MN, MT, NC, NJ, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI - Fair Oaks, CA
#MortgageMadeEasy Fair Oaks, CA 484-680-4852

Thanks for the mention & kind words, Joy, and a very happy new year to you!  Fingers crossed the rate declines will continue to bring buyers more buying power through 2023!

Jan 02, 2023 05:10 PM
Joy Daniels

You are helpful, caring, empathetic, creative and brilliant!  THANK YOU for teaching an old dog new tricks! 

Jan 10, 2023 08:15 AM
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

This is an excellent post with great information. Thanks for sharing it.

Have a super fantastic week!
Joe Jackson, Realtor-KWCP

Jan 03, 2023 05:12 AM