Here's what experts say to expect from mortgage rates now that inflation keeps rising
Summary
Inflation has risen to its highest point in three years, causing mortgage interest rates to increase from around 5% to about 6.6%. Experts expect mortgage rates to stay high or possibly rise further in 2024, partly due to inflation driven by factors like the conflict in Iran and Federal Reserve policies.Key Facts
- Inflation is currently at its highest level in three years.
- Mortgage rates have increased from the high 5% range to around 6.62%.
- Rising inflation causes investors to sell mortgage bonds, which pushes mortgage rates up.
- The war in Iran is contributing to inflation and rising mortgage rates.
- Experts predict mortgage rates will stay in the mid-to-upper 6% range this year, possibly hitting 7%.
- The Federal Reserve has not cut interest rates in 2026 and may raise them by the end of the year.
- Higher mortgage rates and inflation make housing less affordable by increasing home prices and insurance costs.
- Inflation reduces buyers' purchasing power by increasing costs faster than wages, especially affecting lower-income borrowers.
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