Why Are Mortgage Interest Rates Rising So Quickly And Will They Keep Rising?

Why are mortgage interest rates rising so quickly and will they continue to do so?

This year alone, we have seen the federal reserve raise the 30-year fixed mortgage rate six times. According to Sam Khater, chief economist from Freddie Mac, “The uncertainty and volatility in financial markets, is heavily impacting mortgage rates. The 30-year fixed rate mortgage has more than doubled over the last year.” As you can see, these are significant increases. So, what is driving up the mortgage rates so quickly?

The main answer has to do with inflation. The Federal Reserve is trying to bring soaring inflation down and slow the economy which is having an impact on mortgage rates and the housing market. Until we see inflation come down, we may continue to see mortgage rates continue to rise in the new year. So, what does that mean for 2023?

According to Mark Fleming, chief economist of First American, “While mortgage rates are expected to continue to drift higher over the coming months, much of the rapid increase in rates is likely behind us.” This means we may not necessarily see the rapid spikes we saw this year in rates, and instead, more of a stabilization.

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