As expected interest rates have been on the rise since the end of 2021. Our government has adjusted fiscal policy in an attempt to slow inflation and this effects mortgage customers.
Interest Rates have already jumped more than expected
In the latter part of 2021 we saw a spike in inflation. Rising gas prices, supply shortages, international tariffs and all types of inflationary pressures.
Prices on real property have sky rocketed which is great for existing homeowners but this has become a challenge for future home buyers. To slow this process of home prices getting out of reach the government has adopted a policy of tempering it’s purchase of US government backed securities. From what I have been told they went from purchasing about 50 billion a month to about 5 billion a month. This process has caused mortgage rates to rise.
The typical rate on a 30 year fixed has jumped from about 2.875% to about 3.875%. This will deter some buyers which should slow the demand for housing a little bit.
Two to three additional rate increase are expected in the next year and a half with the Federal Reserve hinting that the prime rate will be raised .25% very soon.