The current turmoil in the financial market means it could become more difficult to buy a home, particularly if government regulators like the Federal Reserve crack down on banks following the collapse of SVB. The Fed also implemented a historic rate hike regime to control inflation, and most economists expect that to continue.
“If the banks are in trouble, they might be reluctant to lend,” Treasury Secretary Janet Yellen said Thursday in testimony before the Senate Finance Committee. “We could see credit becoming more expensive and less available.”
“That could make it a source of significant economic risk,” she added.
Last week’s banking crisis leaves more questions than answers. The meteoric collapse of two US banks and the loss of investor confidence in Credit Suisse led to wild market swings and put Wall Street on edge.
On CNN’s prime-time special, “Bank Bust: Inside the Collapse of SVB,” experts explored how best to understand what’s happening in a rapidly changing and confusing environment for banks. financial institutions.
“I think realistically, from what we’ve heard from the Fed, interest rates are likely to continue to rise,” said Vivian Tu, a former JPMorgan trader.
“On top of that, I think a lot of people are feeling really worried, ‘Hey, if I’m saving up for a down payment, is a bank a safe place to put that money? “”
The 30-year fixed rate mortgage averaged 6.73% during the week ending March 9. A year ago, it was 3.85%.
Freddie Mac is expected to release its average weekly mortgage rates at 12 p.m. ET Thursday.