Mortgage rates are likely to remain high despite the Federal Reserve’s pause on interest rate hikes.
While that may be a good sign for fixed-income funds in California, the pause is a blow to affordable housing in the state, California State Treasurer Fiona Ma said during CNBC’s Financial Advisor Summit.
The Fed said on Wednesday it would keep interest rates on hold in June after the committee raised interest rates 10 times since March 2022. Policymakers have said they expect two quarterly interest rate hikes by the end of this year.
In California, a state where the cost of living is high, affordable housing and savings programs remain a priority for Ma.
“Trying to make sure my agencies are proactive has been key,” Ma said.
Rising interest rates have affected the real estate market, making it harder for people to afford to buy a home. To make things easier, Ma launched a new program on March 27 called Dream for All, where the state of California provided down payment assistance to qualified first-time buyers. The program ended after two weeks due to overwhelming demand.
“Demand for home ownership is still strong, but yes, once we can bring rates back down, I think the property market will boom again,” Ma said.