The Federal Reserve on Wednesday halted its streak of 10 consecutive rate hikes since March 2022.
The pause is welcome news in the housing industry, which has seen mortgage rates roughly double since the start of last year, but the relief is unlikely to last.
After the unanimous vote to leave rates as is, Fed Chair Jerome Powell said more increases are likely later in the year to help bring down inflation.
“Tuesday’s CPI report suggests that inflation pressures persist, and the Fed will consider another hike next month,” CoreLogic Chief Economist Selma Hepp said. “The likelihood of another hike or two has also increased, given the lack of credit crunch the Fed was expecting from the banking sector. As a result, mortgage rates, while still on a gradual decline, are likely to remain higher through the remainder of the year.”