Why are mortgage interest rates rising so quickly and will they continue to do so? In today’s real estate market, that is the question that a lot of people are asking. This year alone we have seen the 30 year fixed mortgage rates raised six times!
According to Sam Khater, chief economist from Freddie Mac, “The uncertainty and volatility in financial markets, is heavily impacting mortgage rates. The 30 year fixed rate mortgage has more than doubled over the last year.” As you can see, these are significant increases. So, what is driving up the mortgage rates so quickly? The main answer has to do with inflation. The federal reserve is trying to bring soaring inflation down and slow the economy which is having an impact on mortgage rates and the housing market. Until we see inflation come down, we may continue to see mortgage rates continue to rise in the new year.
So, what does that mean for 2023? According to Mark Fleming, chief economist of First American, “While mortgage rates are expected to continue to drift higher over the coming months, much of the rapid increase in rates is likely behind us.” This means we may not necessarily see the rapid spikes we saw this year in rates and more of a stabilization.
Let Us Guide You
In times of uncertainty, it is very important to have a trusted expert on your side that can help educate you in this market and navigate you through it. Please feel free to connect with our team so we can update you on the latest developments with regard to the housing market and mortgage rates, to help you make an informed decision whether buying or selling.