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Multifamily Minute Reader Reflections: How Many More Rate Hikes in 2023?
Despite the pause or skip, nearly all our respondents feel there's more pain yet to come.
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!The Fed's announcement of a pause (or skip, depending on who you ask) last week came with a caveat: There will likely be more interest rate hikes coming soon. How soon? They didn't say — but most analysts anticipate a rate increase potentially as soon as the next meeting, on the 25th and 26th of July.
So, after last week, we put the question to you: How many more times will rates rise before the end of 2023?
Survey Results
The results of last week's survey are below:
How many more rate hikes this year? | Percent of Respondents |
|---|---|
Zero, and we'll even see a rate decrease | 1% |
Zero; we'll hold steady | 4% |
One | 37% |
Two | 40% |
Three | 16% |
Four | 2% |
It's a pretty even split between one and two more rate hikes this year, which is a roughly similar sentiment held by many economists. There's some indication that the Fed is planning two more, but the changing economic outlook means anything's possible at this point.
If you're sweating each rate hike as a borrower, two quick things to point out.
First, the federal funds rate isn't precisely correlated with your loan's rate. Yes, as the federal fund rate climbs, your future loan's interest rate generally will too — but not always, and not always immediately.
Second, if your loan doesn't have a fixed rate… You'd better start thinking of refinancing. Seriously. As property operation costs continue to skyrocket, the last thing you want is unpredictable debt service expenses.
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Our Previous Survey
First time here? Curious what we talked about last week? Find out our subscribers' thoughts — and our analysis — about what the multifamily construction boom means for you as an investor.