Yes, Mortgage Rates Will Come Down, It’s Just a Matter of Time
This past year, rising mortgage rates have slowed the red hot housing market. Over the past nine months we’ve seen fewer homes sold than the previous month as home price growth has slowed. All of this is due to the fact that the average 30 year fixed mortgage rate has doubled this year. And, severely limiting homebuying power for consumers. This month the average rate for financing a home briefly rose over 7% before coming back down into the high 6% range. But we’re starting to see a hint of what mortgage interest rates could look like next year.
Inflation is the Enemy of Long-Term Interest Rates
As long as inflation is high, we’ll see higher mortgage rates. Over the past couple of weeks, we’ve seen indications that inflation may be cooling, giving us a glimpse into what may happen in the future. The mortgage market is eagerly awaiting positive news on inflation.
What Does this Mean for the Future of Mortgage Rates?
As we get through the inflation battle and start to see that coming down, we should expect mortgage rates to follow. We’ve seen evidence of this over the past couple of weeks. As the Federal Reserve works to bring inflation down, mortgage rates will come down as well.
Bottom Line
Mortgage rates will come down – it’s just a matter of time. The hope is we continue to see more positive news on inflation, and that will bring mortgage rates down. This will give prospective homebuyers more buying power and lead to more homeowners throughout the country.