The current turmoil in the financial markets means that buying a home could become more difficult, especially if government regulators like the Federal Reserve crack down on banks after the collapse of SVB. The Fed has been in historic rate-hiking mode to keep inflation in check, and many economists expect that to continue.
“If banks are stressed, they may not want to lend,” Treasury Secretary Janet Yellen said in a statement to the Senate Finance Committee on Thursday. “We’ve seen credit become more expensive and less affordable.”
“This could make it a source of much less economic risk,” he added.
Last week’s bank collapse leaves more questions than answers. The spectacular collapse of two US banks and the loss of investor confidence in Credit Suisse sent wild market swings and left Wall Street on edge.
In a CNN special, Bank Collapse: Inside the SVB Fall, experts discuss how to best understand what’s happening in a fast-paced and confusing environment for financial institutions.
“I think from what we’ve heard from the Fed, interest rates are likely to go up,” said Vivian Tu, a former JPMorgan trader.
“Also, I think a lot of people are like, ‘Hey, if I’m saving for a down payment, is the bank going to be a safe place to put that money?’ is very worried.”
A 30-year fixed rate mortgage averaged 6.73%. During the week ending March 9. A year ago it was 3.85%.
Freddie Mac releases its weekly average mortgage rates on Thursday at 12:00 PM ET.
