• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

High mortgage rates

The average rate on the 30-year fixed home loan clocked in at 7.31% on Sept. 28, its highest level since 2000, according to housing giant Freddie Mac.

In the week previous to El-Erian’s comments, the average rate hit 7.23%, which at the time Freddie Mac said was the highest it had been since 2001.

The federal funds rate was last raised in July to the 5.25% to 5.5% range, and there’s a possibility the Fed could implement another hike when officials meet again Oct. 31-Nov. 1, potentially driving mortgage rates even higher.

“We’ve got to be really careful,” El-Erian warned. “The housing market is central to the economy.”

Stop overpaying for home insurance

Home insurance is an essential expense – one that can often be pricey. You can lower your monthly recurring expenses by finding a more economical alternative for home insurance.

Officialhomeinsurance can help you do just that. Their online marketplace of vetted home insurance providers allows you to quickly shop around for rates from the country’s top insurance companies, and ensure you’re paying the lowest price possible for your home insurance.

Explore better rates

Buyers and sellers at a standstill

El-Erian says high mortgage rates have tamped down housing supply and demand, with many buyers priced out of the current market and sellers reluctant to let go of the cheap mortgage rates they secured in the early years of the COVID-19 pandemic.

The median home sale price also climbed 1.7% year-over-year to $421,872 in July, according to Redfin — just 2.5% behind the record high of $432,476 set in May of last year.

In the week of Aug. 18, applications for home purchase mortgages plummeted to their lowest level since April 1995, according to the Mortgage Bankers Association.

The Fed wants to bring inflation down to 2%

Fed chair Jerome Powell says he’s determined to bring inflation down to 2%, but doesn’t see it cooling to that level until 2025.

"The key issue: is 2% the right target?” asked El-Erian, who also suggested there’s a real possibility Americans could simply end up living with a stable inflation rate of over 2%.

“What we're looking at right now is a possibility that headline inflation will head back up,” El-Erian added.


Follow These Steps if you Want to Retire Early

Secure your financial future with a tailored plan to maximize investments, navigate taxes, and retire comfortably.

Zoe Financial is an online platform that can match you with a network of vetted fiduciary advisors who are evaluated based on their credentials, education, experience, and pricing. The best part? - there is no fee to find an advisor.

About the Author

Serah Louis

Serah Louis


Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

What to Read Next

It's a lengthy, complicated process, so just keep your eyes on the prize: your new home.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.