{"id":8133,"date":"2023-09-06T10:30:00","date_gmt":"2023-09-06T10:30:00","guid":{"rendered":"https:\/\/thezakariagroup.com\/mortgage-rates-past-present-and-possible-future\/"},"modified":"2023-09-06T10:30:00","modified_gmt":"2023-09-06T10:30:00","slug":"mortgage-rates-past-present-and-possible-future","status":"publish","type":"post","link":"https:\/\/thezakariagroup.com\/mortgage-rates-past-present-and-possible-future\/","title":{"rendered":"Mortgage Rates: Past, Present, and Possible Future"},"content":{"rendered":"
If you\u2019re hoping to buy a home<\/a> this year, you\u2019re probably paying close attention to mortgage rates<\/a>. Since mortgage rates impact what you can afford when you take out a home loan \u2013 and affordability is a challenge today \u2013 it\u2019s a good time to look at the big picture of where mortgage rates have been historically compared to where they are now. Beyond that, it\u2019s important to understand their relationship with inflation<\/a> for insights into where mortgage rates<\/a> might go in the near future.<\/p>\n Freddie Mac<\/em> has been tracking the 30-year fixed mortgage rate since April of 1971. Every week, they release the results<\/a> of their Primary Mortgage Market Survey<\/em>, which averages mortgage application data from lenders across the country (see graph below<\/em>):<\/p>\n <\/a>Looking at the right side of the graph, mortgage rates have increased significantly since the start of last year. But even with that rise, today\u2019s rates are still below the 52-year average. While that historical perspective is good context, buyers have gotten used to mortgage rates between 3% and 5%, which is where they\u2019ve been over the past 15 years.<\/p>\n That\u2019s important because it explains why the recent jump in rates might have you feeling sticker shock even though they\u2019re close to their long-term average. While many buyers have adjusted<\/a> to the elevated rates over the past year, a slightly lower rate would be a welcome sight. To determine if that\u2019s a realistic possibility, it\u2019s important to look at inflation<\/a>.<\/p>\n The Federal Reserve<\/em> has been working hard to lower inflation since early 2022. That\u2019s significant because, historically, there\u2019s been a connection<\/a> between inflation and mortgage rates (see graph below<\/em>):<\/p>\n <\/a>This graph shows a pretty reliable relationship between inflation<\/a> and mortgage rates<\/a>. Looking at the left side of the graph, each time inflation moves significantly (shown in blue<\/em>), mortgage rates follow suit shortly after (shown in green<\/em>).<\/p>\n The circled portion of the graph points out the most recent spike in inflation, with mortgage rates following closely behind. As inflation has moderated a bit this year, mortgage rates haven\u2019t yet made a similar move.<\/p>\nGiving Context to the Sticker Shock<\/strong><\/h4>\n
Where Could Mortgage Rates Go in the Future?<\/strong>\u00a0<\/h4>\n