Mortgage Interest Rates are doing much better than we have seen in the last couple months. It’s been such a bumpy ride, watching rates go up and up and up since around February. For them to steady off and actually go down a little has been a breath of mortgage fresh air.
The bond market finally stabilized last week after being slaughtered for weeks and weeks. The bad bond market pushed rates higher at the fastest pace since the early 1980’s. Why? Inflation. The Fed had to start raising rates and stop it’s buying of mortgage backed securities. It is only the beginning – most experts expect the Fed to keep tightening their policy to check inflation.
How long will the Fed keep tightening and raising their rate? It’s unclear. But most likely until they feel comfortable that inflation is in check and not a worry to the overall economy. Some indicators show we are already seeing inflation start to soften, albeit ever so slightly.
Don’t expect mortgage rates to stop going up though. This is a slow down, not necessarily a hard stop. It’s likely rates will rise some more throughout 2022.