The Federal Reserve is expected to raise interest rates by three-quarters of a percentage point tomorrow.
It would be the fourth jumbo rate hike in six months.
”What makes this so significant is that we started from what were rock-bottom record-low levels of interest rates, and we're now seeing this breakneck pace of rate increases,” said Greg McBride, chief financial analyst with Bankrate.com. “Just how high the Fed has to go is very much a moving target.”
The rate hikes make major purchases more expensive.
An average car buyer would pay about $1,000 in extra interest due to the rising rates, while a $300,000 home could cost you $200,000 more in interest.
The higher prices are destroying demand. Analysts say the car industry outlook is negative.
Home sales have fallen every month since January.
“What you've seen is the housing market has come full circle. It's really slowed from what had been a frenetic pace to a near-standstill now,” McBride said.
Because of the conditions, experts believe this may be the last jumbo rate hike for a while.
Fed Chairman Jerome Powell said in September that at some point, “It will become appropriate to slow the pace of rate hikes while we assess how our policy adjustments are affecting the economy."