The Federal Reserve rate increase could be a good thing for homebuyers

Jun 15, 2022, 10:36 PM | Updated: 11:20 pm

SALT LAKE CITY – A local mortgage loan officer says the recent rate hike by The Federal Reserve isn’t all bad news.

In fact, Jerry Nielsen, who has helped people get mortgage loans for 20 years, said the .75 hike dropped mortgage rates, at least initially.

It’s all about how investors feel the feds are managing inflation. The most significant single hike since 1994 will raise rates on almost all financing – everything from car loans and credit card rates.

But, at least for mortgages, rates have already been steadily going up over the last six months and really jumped when the Federal Reserve only bumped them by a quarter of a percentage point back in March.

“The market sentiment was they should have increased it by a half a percent,” says Nielsen who explains mortgage rates, that day, jumped immediately based on the impression the feds didn’t have a good handle on out-of-control inflation.

Home prices in Utah have gone up 20% in just the past year.

Combine that with interest rates that are more in line with historic levels, and the housing market, while still strong in Utah, has cooled since it hit a fever pitch last July and August.

That could be a positive thing for people looking to purchase a home.

There is talk of a recession that could hit early next year but, in Utah, there’s still a housing deficit so it’s not probable that prices will plummet.

The change in interest rates, combined with the higher prices, means the market could be shifting from a hot seller’s market, with people coming to the table with “above asking price” cash offers to something that becomes more economically friendly.

Nielsen says now is a better time to buy a house in Utah than it was at this time last year since demand has cooled slightly.

The change means buyers aren’t in stiff competition to purchase homes, often getting into bidding wars.

And, if history is any indicator, houses will continue to appreciate, which means buying now, rather than later, could save you money in the long run.

KSL 5 TV Live


Homes in Centreville, Maryland...

By Anna Bahney, CNN

US mortgage rates climb to highest level since November

US mortgage rates jumped higher last week as uncertainty about the debt ceiling standoff sent bond yields rising.

2 days ago

Free Frazil Fridays Utah...

Cimaron Neugebauer

3 steps to enjoy a free Frazil on Fridays in Utah, Idaho, Nevada

Free Frazil Fridays: Grab a 12 oz. cup at a participating Utah, Idaho or Nevada location and fill it up with your favorite Frazil flavor.

3 days ago

Tanya Vea...

Larry D. Curtis

Darrell Brown to retire as Bonneville president, Tanya Vea will helm company

SALT LAKE CITY — President of Bonneville International Corporation, Darrell Brown, announced his retirement Thursday, scheduled beginning in August 2023. Tanya Vea will be Bonneville’s new President and Chief Operating officer starting Aug. 1. Brown started as president of Bonneville in December of 2013. During his tenure helming the broadcast company, it acquired four stations […]

3 days ago

Car mirror with credit score in it...

Matt Gephardt and Cindy St. Clair, KSL TV

Despite on-time payments, woman’s credit score drops due to company not reporting

A Box Elder County woman bought a car and made payments on time to boost her credit scores. It did the opposite. Matt Gephardt investigates what went wrong.

3 days ago

One of the driveways that is rising in Eagle Mountain. (KSL TV)...

Ladd Egan

Eagle Mountain homeowners ask city hall for help with sinking driveways

A group of Eagle Mountain homeowners are asking for the city's help after several new homes started to show sinking walkways and driveways.

5 days ago


Laura He and Hanna Ziady

Global market cheers for US debt ceiling deal fade

European stocks and oil prices gave up early gains Monday, but US stock futures stayed positive following weekend news of an agreement that could avert a catastrophic US debt default.

6 days ago

Sponsored Articles

Brunette guy in headphones playing games on his desktop computer...

PC Laptops

Looking For a New Computer? Use This Desktop Buying Guide

Choosing a new desktop computer can come with a lot of questions, so we created this desktop buying guide.

Portrait of happy boy playing and splashing water in the swimming pool...

Get Out Pass

Family Fun Activities in Utah You Have to Try This Summer

These family fun activities will entertain you all summer, so if you ever feel stuck in a rut wondering what to do, refer to this guide!

Woman IT specialist in elegant suit working on notebook computer in data center next to server rack...

Les Olson

Your Complete Guide to Outsourcing IT Services

This guide covers everything you need to know about the different benefits of outsourcing IT services to meet your small business needs.

diverse group of friends dance outside under string lights...

Lighting Design

5 Frequently Asked Questions About Outdoor Lighting

Read for the most frequently asked questions about outdoor lighting to help narrow the search for your home.

Stack of old laptops with dark background...

PC Laptops

Old Laptop Upgrades You Need to Try Before Throwing it Away

Get the most out of your investment. Try these old laptop upgrades before throwing it out to keep it running fast and efficient.

Happy diverse college or university students are having fun on their graduation day...

BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.

The Federal Reserve rate increase could be a good thing for homebuyers