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INDIANAPOLIS — For the third month in a row, the Federal Reserve raised interest rates. This time by three-quarters of a point.

This comes as the feds work to cool inflation and slow the economy. This is the interest rate banks use to lend funds to each other.

“The fed did not anticipate such high inflation and so it acted a little late in terms of raising interest rates,” Bill Rieber, Economist at Butler University, said.

This is why Rieber says the feds are raising the interest rate so quickly and by so much.

“They’re raising it faster and greater amounts than they otherwise would have done if they had recognized the inflation earlier,” Rieber added.

Economists like Rieber said it’s difficult to anticipate how this hike will increase mortgage rates.

“It will slow the market, that’s for sure. How much? It’s difficult to say,” Rieber said. “How high the mortgage rate will rise, we don’t know.”

Real estate experts said any increases in mortgage rates will slow down the housing market.

“When you’re talking about people who are first-time home buyers and/or are younger and moving up, right, then they probably have limited equity on their balance sheet,” Doug McCoy, Center for Real Estate Studies Director at the IU Kelley School of Business, explained. “They’re much more sensitive to the interest rate hike. That’s where demand will slide.”

McCoy advises patience as the housing market cools.

“You don’t want to overpay,” McCoy cautioned. “It never is good to overpay. There’s always a deal out there, you’ve just got to find it.”

According to the Indiana Association of Realtors, the state’s housing inventory is increasing. A July 22 release shows a 5.8% increase in listings in June over June 2021.

The monthly inventory reached 10,550 homes, which is the first time the monthly inventory rose above 10,000 since December 2020.