economy
Here's what experts say to expect from mortgage rates now that inflation keeps rising
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TL;DR
- Inflation's peak in three years has caused mortgage interest rates to climb from the high 5% to 6.62%.
- Experts predict rates will remain in the mid-to-upper 6% range, possibly hitting 7% if the Iran conflict continues.
- Rising inflation increases bond yields, which directly leads to higher mortgage rates.
- Federal Reserve policy is unlikely to lower rates this year; a rate hike is more probable.
- Higher inflation impacts housing affordability by increasing monthly payments, home prices, insurance, and reducing buyers' budgets.
- Inflation erodes the purchasing power of savings and down payments, with real wages becoming negative.
- Potential strategies to manage higher rates include adjustable-rate mortgages, relationship pricing, first-time buyer programs, and shopping around for lenders.