Mortgage rates witnessed a significant surge this week, peaking at almost 7%, marking the highest point of the year. However, industry experts are optimistic that rates may soon decline in the coming weeks. This prediction is based on recent inflation data, which suggests a cooling trend. According to Freddie Mac, the rate on a 30-year fixed mortgage rose from 6.81% to 6.96% compared to the previous week. Nevertheless, newly released government data on Wednesday indicates a slowdown in inflation, reaching its lowest level since early 2021.
Over the past week, mortgage rates experienced a notable increase, climbing to nearly 7%. The 30-year fixed mortgage rate, as reported by Freddie Mac, jumped from 6.81% to 6.96% compared to the previous week. This sharp upward movement has concerned prospective homebuyers and those seeking to refinance their mortgages.
Inflation plays a significant role in determining mortgage rates. Higher inflation typically leads to increased borrowing costs, which translates to higher mortgage rates. Conversely, when inflation subsides or shows signs of moderation, it can put downward pressure on mortgage rates. The recently released government data revealing a cooling in inflation has raised expectations of a decline in mortgage rates in the near future.
