--- title: Election Day Adds to Uncertainty description: Home loan rates have improved from the highest levels of 2022. With more inventory coming to market and many sellers eager to make deals, now could be a great time to consider taking advantage of the opportunities in housing. image: https://info.carringtonmortgage.com/hubfs/IMAGES/Market%20Trends/Market%20Trends_2022.11.14.jpg --- [Skip to content](https://info.carringtonmortgage.com/knowledge-base/election-day-adds-to-uncertainty#main-content) ![bell icon](https://info.carringtonmortgage.com/hubfs/raw_assets/public/Templates/2022/svg/Alert-Notifications-Icon.svg) [![Carrington Mortgage Services](https://info.carringtonmortgage.com/hs-fs/hubfs/carrington_logo_final_2col_rgb.png?width=250&height=57&name=carrington_logo_final_2col_rgb.png)](https://www.carringtonmortgage.com) - [About Us](https://www.carringtonmortgage.com/our-mission) - [Careers](https://www.carringtonhc.com/careers) - [Investors](https://www.carringtonhc.com/investors) - [Contact Us](https://www.carringtonmortgage.com/contact-us) [Recent Transfer](https://www.carringtonmortgage.com/new-customers) [Customer Login](https://www.carringtonmortgage.com/login) MAKE HOME WORK Manage My Home arrow-down-anticon/submenu Manage My Mortgage arrow-down-anticon/submenu Learning Center MAKE HOME WORK Manage My Home arrow-down-anticon/submenu - I Am Ready to Start - [Buy a Home](https://www.carringtonmortgage.com/home-loans/buy-a-home/check-existing-customer) - [Refinance My Home](https://www.carringtonmortgage.com/home-loans/refinance-a-home/refinance-step) - What Loan Is Right For Me? 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Let's discuss what happened and look into the week ahead. **Consumed By Uncertainty** It has been nearly a year since the Federal Reserve flip-flopped on the idea that high inflation was "transitory" and the need for that word to be retired. Since that time, we have experienced unprecedented uncertainty in the financial markets, with home loan rates moving from 3% to 7%...the fastest rate of change in our history. A lot of the uncertainty, and thus volatility, is surrounded by where inflation and the overall economy is and how far is the Fed going to go with rate hikes. With the election results still up in the air, we should expect to see more of the same continued uncertainty and volatility. **Balance of Power Rate Impact** Mixed control between Congress and the White House could benefit interest rates. How? It makes it more challenging to deliver large scale changes to tax policy or deficit spending to try and help the economy. On the spending, lower spending likely helps to lower inflation, which means lower rates. **The Terminal Rate** How high will the Fed raise rates? Currently, the Fed Funds Rate, which is an overnight rate the Fed hikes and cuts, is in a range of 3.75 - 4.00%. This week, major financial institutions, with most forecasting the terminal rate, or the peak in the Fed Funds Rate to be 5.00%, coming by May 2023. It is important to note, that while the Fed Funds Rate may increase by another 1.25% between now and next May, that doesn't mean long-term rates will go higher. The only way long-term rates go higher is if the economy can absorb the increased rates. Mortgage bonds and Treasuries are essentially at the same levels they were back in late September, so long-term rates are starting to buck the idea of moving higher. **The Fed Step Down** After four consecutive .75% rate hikes, the markets are wondering and hoping the Fed will "step down" the size of rate hikes come December. Currently, there is a 57% chance of a .50% rate hike. A smaller rate hike would make sense as the Fed will have raised rates by 3.50% in the second half of the year and those hikes have yet to hit the economy. **Bottom Line:** *Home loan rates have improved from the highest levels of 2022. With more inventory coming to market and many sellers eager to make deals, now could be a great time to consider taking advantage of the opportunities in housing.* ## Related Articles [![](https://info.carringtonmortgage.com/hubfs/Market%20Trends_2022-08-01.jpeg)](https://info.carringtonmortgage.com/knowledge-base/markets-are-forward-looking) [Work Trends](https://info.carringtonmortgage.com/knowledge-base/tag/work-trends) ### [Markets Are Forward-Looking](https://info.carringtonmortgage.com/knowledge-base/markets-are-forward-looking) **"I think we can slow down from the .75% at the next meeting. 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