How an Expert Can Help You Understand Inflation & Mortgage Rates

Two of the biggest problems consumers confront now are inflation and mortgage rates if you follow the housing industry. Let's examine each one separately.

Inflation and the Housing Market

Inflation rose to a level not seen in forty years this year. You probably felt the pinch at the petrol station and in the grocery store, like the typical customer. Your capacity to save money for a home purchase might have been hampered.

Despite the Federal Reserve's best efforts to contain inflation, the numbers for August indicate that it was still higher than anticipated. The stock market was affected by this information, and discussions of a recession increased. Additionally, it was a factor in the Federal Reserve's previous week's decided to increase the Federal Funds Rate. As per Bankrate:

“. . . the Fed has raised rates again, announcing yet another three-quarter-point hike on September 21 . . . The hikes are designed to cool an economy that has been on fire. . .”

Although their choices haven't directly affected the movement of mortgage rates, they have helped to cause the housing market's deliberate cooling off. According to a recent Fortune article:

“As the Federal Reserve moved into the inflation-fighting mode, financial markets quickly put upward pressure on mortgage rates. Those elevated mortgage rates . . . coupled with sky-high home prices, threw cold water onto the housing boom.”

The Impact on Rising Mortgage Rates

The significant decline in buyer demand in recent months is mostly attributable to this year's hikes in mortgage rates. Basically, the cost of purchasing a home increased along with rates (and housing prices). Home sales slowed as a result, and the number of available properties increased as a result. This put pressure on affordability and priced some purchasers out of the market.

Where Rates and Inflation Will Go From Here, According to Experts
Both of these elements will continue to have an effect on the housing market going forward. A current CNET article summarizes the connection between inflation and mortgage rates as follows:

“As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.”

Sam Khater, Chief Economist at Freddie Mac, has this to say about where rates may go from here:

“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, . . .”

Even though it's impossible to predict where mortgage rates will go from here with any degree of precision, there is something you can do to stay informed: get in touch with a reputable real estate advisor. They keep an eye on current events and aid you in comprehending what the experts are predicting. They can offer you the greatest guidance imaginable.

Housing has clearly been impacted by rising mortgage rates and inflation. Consult a reputable real estate agent for a knowledgeable analysis of the most recent home market developments and what they signify for you.

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