If you need assistance, please call 651-735-7653

Fall Home Selling Checklist

Tuesday, September 13, 2022   /   by Louetta Larson

Fall Home Selling Checklist

How an Expert Can Help You Understand Inflation & Mortgage Rates


How an Expert Can Help You Understand Inflation & Mortgage Rates | MyKCM



If you’re following today’s housing market, you know two of the top issues consumers face are inflation and mortgage rates. Let’s take a look at each one.


Inflation and the Housing Market


This year, inflation reached a high not seen in forty years. For the average consumer, you probably felt the pinch at the gas pump and in the grocery store. It may have even impacted your ability to save money to buy a home.


While the Federal Reserve is working hard to lower inflation, the August data shows the inflation rate was still higher than expected. This news impacted the stock market and fueled conversations about a recession. It also played a role in the Federal Reserve’s decision to raise the Federal Funds Rate last week. As Bankrate says:



“. . . 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. . .”



While their actions don’t directly dictate what happens with mortgage rates, their decisions have contributed to the intentional cooldown in the housing market. A recent article from Fortune explains:



“As the Federal Reserve moved into 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


Over the past few months, mortgage rates have fluctuated in light of growing economic pressures. Most recently, the average 30-year fixed mortgage rate according to Freddie Mac ticked above 6% for the first time in well over a decade (see graph below):


How an Expert Can Help You Understand Inflation & Mortgage Rates | MyKCM


The mortgage rate increases this year are the big reason buyer demand has pulled back in recent months. Basically, as rates (and home prices) rose, so did the cost of buying a home. That pushed on affordability and priced some buyers out of the market, so home sales slowed and the inventory of homes for sale grew as a result.


Where Experts Say Rates and Inflation Will Go from Here


Moving forward, both of these factors will continue to impact the housing market. A recent article from CNET puts the relationship between inflation and mortgage rates in simple terms:



“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, . . .”



While there’s no way to say with certainty where mortgage rates will go from here, there is something you can do to stay informed, and that’s connect with a trusted real estate advisor. They keep their pulse on what’s happening today and help you understand what the experts are projecting. They can provide you with the best advice possible.


Bottom Line


Rising inflation and higher mortgage rates have had a clear impact on housing. For expert insights on the latest trends in the housing market and what they mean for you, let’s connect.



  home prices, housing market, 2022, keeping current matters, real estate, jason gorman real estate team, home equity, spring market, housing inventory, home seller, housing supply, mortgage rates, foreclosures, buyers, sellers market, buying a home, first time home buyer, inflation, investing, real estate investments, student loans, inspection

Jason Gorman Real Estate Team Keller Williams Premier Realty
Jason Gorman
635 Bielenberg Dr. Ste 100
Woodbury, MN 55125
651-735-7653

The data relating to real estate for sale on this web site comes in part from the Broker Keller Williams Premier Realty of the Regional Multiple Listing Service of Minnesota, Inc. Real estate listings held by brokerage firms other than Lakes Area Realty are marked with the Broker ReciprocitySM logo or the Broker ReciprocitySM thumbnail logo (a little black house) and detailed information about them includes the name of the listing brokers.” Listing broker has attempted to offer accurate data, but buyers are advised to confirm all items.” Copyright2023Regional Multiple Listing Service of Minnesota, Inc. All rights reserved. Data last updated October 4, 2023
The data relating to real estate for sale on this web site comes in part from the Broker ReciprocitySM Program of the Regional Multiple Listing Service of Minnesota, Inc. Real Estate listings held by brokerage firms other than Jason Gorman - Jason Gorman Real Estate Team / Keller Williams Premier Realty are marked with the Broker ReciprocitySM logo or the Broker Reciprocity and detailed information about them includes the name of the listing brokers. Listing broker has attempted to offer accurate data, but buyers are advised to confirm all items. Copyright2023Regional Multiple Listing Service of Minnesota, Inc. All rights reserved. Data last updated October 4, 2023
This site powered by CINC: www.cincpro.com