A big question on a lot of peoples minds are why did interest rates go up so quickly and where are they headed?
So I’m here to talk about mortgage rates, where they are right now and where they are headed for the future.
So interest rates right now on a 30 year fixed are about 5%, depending on the scenario. It depends on the credit score, it depends on the program type. At the beginning of this year, they were low threes.
The reason that they went up is because inflation is out of control and the Federal Reserve needs to get that situation under control. So interest rates can come back. The worst thing for mortgage rates is inflation. So the increase in gas prices and inflation the last couple of months has really caused rates to increase substantially.
I kind of hope that rates have stabilized and peaked out right now. Um, you know, one thing that’s going to be happening in the next several months that you’re probably going to see on the news is you’re going to hear about the feds increasing rates. They’re going to have meetings, they’re going to increase.
They’re going to do emergency rate hikes. That’s actually good news for the long-term. Because when the Fed’s get together and do an emergency rate hike, they’re not directly increasing the rate on a 30 year fixed rate mortgage, they’re increasing the prime rate. The federal funds rate. The reason that they’re doing that is to slow down inflation and hopefully inflation slows down the next couple of months.
That will actually cause mortgage rates to come back down.