![]() ![]() Most experts don’t foresee any cuts before the end of 2023 at the earliest. However, the central bank is unlikely to cut rates any time soon. While inflation is still well above its 2% target, the Fed has signaled that it may soon be time to stop raising interest rates. While mortgage rates don’t directly track changes to the federal funds rate, they do respond to inflation, which has been slowly falling since its peak in June 2022. The central bank has been hiking rates since March 2022 to tame inflation, which peaked at 9.1% last June. Inflation and an aggressive rate-hiking regime from the Federal Reserve continue to keep upward pressure on the closely followed 30-year mortgage rate. It’s also the most common, with 90% of Americans opting for 30-year mortgages. Current 30-year mortgage rate trendsįor most people, a 30-year fixed rate mortgage, which is a home loan you pay back over the course of 30 years, is still the most affordable type of home loan available. Here’s what you need to know about how 30-year mortgage rates work, what factors affect them and how to find the best rates for your specific financial situation. Still, taking on a mortgage is one of the biggest financial decisions you’ll make in your lifetime, and the way mortgage rates rise and fall will have an impact on how much your home will cost you. ![]() But experts remain optimistic that mortgage rates will see some relief by the end of the year. “And that issue has been the main factor in today’s sluggish housing market.”įor buyers who’ve grown accustomed to mortgage rates in the 6% range, the most recent surge is concerning. “Over the past year, we saw the fastest increase in 30-year mortgage rates in over 50 years, said Daniel Oney, research director at the Texas Real Estate Research Center at Texas A&M University. As of May 28, new listings of homes for sale had fallen by 17.1% from a year previously, according to real estate brokerage Redfin. With many homeowners reluctant to let go of their mortgage rates, many of which are below current market values, real estate inventory is dwindling. ![]() Higher mortgage rates don’t just decrease home-buying power, they also have an impact on inventory levels. In recent weeks, mortgage rates have been volleying up and down throughout the 6% range - though drama surrounding the US debt ceiling did push rates above 7% for a brief period. But inflation has cooled from its peak at 9.1% last June, and mortgage rates have eased a bit, too. Over the past year, stubborn inflation, and the Federal Reserve’s efforts to tame it, drove mortgage rates up significantly. 2023 may bring some relief for mortgage rates, so long as inflation continues to decline. ![]()
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