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Interest Rates Paused – June 2023

The Federal Reserve is taking a break from its war on inflation. After raising rates 10 times in 10 meetings in 2022 and 2023, the central bank made no change during its latest meeting. The Fed Chairman, Jerome Powell announced no further increase in the federal funds rate on June 14 — at least for now.

The hikes aimed to cool an economy that was on fire after rebounding from the coronavirus recession of 2020. That dramatic recovery has included a red-hot housing market characterized by record-high home prices and microscopic levels of inventory.

However, home sales have dropped sharply, and appreciation slowed nationally, with home prices dropping in many previously overheated markets. 
The rate currently stands at 3.7%.
Higher rates are challenging for both homebuyers, who have to cope with steeper monthly payments, and sellers, who experience less demand and/or lower offers for their homes.

Mortgage rates don’t take direct cues from the Fed and will instead respond to the outlook for the economy and inflation.

Mortgage lenders and investors closely watch the central bank, and the mortgage market’s attempts to interpret the Fed’s actions affect how much you pay for your home loan.

In the near term, mortgage rates could pause alongside the Fed, or even drop slightly, given the lack of immediate upward pressure. The longer-term outlook depends considerably on how long the central bankers’ pause lasts.

About Knoxville, TN

Knoxville, TN has 1,672 homes on the market. The inventory of homes for sale in Knoxville, TN between April 2023 and May 2023 increased by 5.3%. Listing prices have changed in this real estate market between April 2023 and May 2023: the cost of 1 bedroom properties have not changed, 2 bedrooms properties prices increased by 19.5%, prices of 3 bedrooms properties went up by 23.9%, prices of 4 bedrooms properties increased by 20.3%, 5 bedrooms properties became 13.5% more expensive. Volume of homes for sale changed: 1 bedroom homes inventory increased by 5.9%, 2 bedrooms homes inventory decreased by 8.3%, 3 bedrooms homes inventory increased by 8.4%, volume of 4 bedrooms homes went up by 9.7%, the quantity of 5 bedrooms homes went up by 0.6%. In May 2023, from all listings sold in Knoxville, TN there were more than 208 sold above asking price, over 183 sold below and more than 113 were sold right at the asked price.

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