Much to the surprise of no one, mortgage rates have been on the rise in recent months. This trend shows little to no signs of stopping any time soon, but the fast-and-furious pace of rate hikes seems to be slowing, if only slightly. There are a few reasons why the cost of home lending has been creeping upward so steadily. Let’s take a closer look.
So what’s been driving this runaway train of home lending costs lately? There are a few things that have been influencing the market, including the following:
Rising mortgage rates mean that it will be more expensive to buy a home. Home buyers will need to make a larger down payment or qualify for a higher-rate mortgage. However, there are still some good deals to be found, and it is still possible to buy a home in a rising rate environment.
Thankfully, there are a few things that home buyers can do to prepare for rising mortgage rates. They include the following:
It is difficult to say what the future holds for mortgage rates. However, the Federal Reserve has signaled that it is likely to continue raising interest rates in an effort to combat inflation, though the pace of these increases has certainly slowed down. This means that mortgage rates are likely to remain high for the foreseeable future.
Additional factors that can affect mortgage rates include the state of the economy. When economic outlooks are strong, interest rates are likely to be higher. The stock market can also affect mortgage rates. For example, if the stock market is doing well, interest rates are likely to be lower. Finally, it’s impossible to discount how political factors can also affect mortgage rates. For example, if there is a change in government, interest rates are likely to fluctuate.
Mortgage rates are a complex issue, and there are many factors that can affect them. However, by understanding the basics of mortgage rates, home buyers can be better prepared to navigate the current market and find a good deal on a home. Keep your eyes open and your ear to the ground and you’ll be prepared for anything that comes your way!