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  • Writer's pictureKaci Gebora

Expert Advice on Inflation and Mortgage Rates

Inflation and mortgage rates are two of the most important challenges customers face in today's market, as everyone who follows the current housing market is aware. Let's take a look at each one of them in turn.

The Housing Market in Relation to Inflation

This year, inflation skyrocketed to levels unseen in the previous four decades. If you're like the typical consumer, you undoubtedly felt the squeeze while filling up your petrol tank and shopping for groceries. It may have even prevented you from saving enough money to purchase a house in the future.

Even though the Federal Reserve is exerting a lot of effort to bring inflation down, the August figures reveal that the inflation rate was still higher than predicted. This information affected the stock market and spurred discussions about the possibility of a recession. Additionally, it was a factor in the decision made by the Federal Reserve to boost the target range for the federal funds rate a week ago.

Even if their actions do not directly determine what occurs with mortgage rates, the choices that they have made have contributed to the deliberate slowdown that has been happening in the housing market.

The Effect on the Continuous Increase in Mortgage Rates

Mortgage rates have been all over the place over the last several months as a direct result of the mounting economic challenges. According to Freddie Mac, the average rate for a 30-year fixed mortgage has pushed over 6% for the first time in well over a decade (see graph below):

The significant rises in mortgage rates this year are the primary reason for a slowdown in buyer demand in recent months. The overall cost of purchasing a house increased with rising interest rates (as well as rising housing prices). Because of this, affordability was impacted, and some potential purchasers were priced out of the market. Consequently, house sales slowed, and the inventory of properties for sale increased.

What the Experts Think the Future Holds for Interest Rates and Inflation

Both of these issues are going to continue to have an effect on the housing market in the future.

You cannot predict with absolute certainty where mortgage rates will go from here; however, there is something you can do to keep yourself informed, and that is to get in touch with a reliable real estate expert. They maintain a current awareness of what is occurring in the world and can explain to you what predictions are being made by experts. They can provide you with the most helpful guidance imaginable.

There is no denying the effect of rising inflation and increasing mortgage rates on the housing market. Let's get in touch so I can share my professional observations on the most recent developments in the property market and what those changes imply for you.

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