Second most asked question is, “Do you think the market will go down more?”
My quick answer, is NO, not significantly.
Let’s look at some factors that are causing the market slow down. In this blog, let’s get a little bit deeper into mortgage interest rates.
Current mortgage rate increases are mainly driven by inflation. Not by the Fed rate increases as some may believe.
You can see how closely mortgage rates follow the movement of the consumer price index over the years.
Only prolonged period of exception recent memory is during QE(Quantitative Easing) from 2020-2021 due to COVID19.
Let’s look at recent inflation a little more closely.
Inflation during summer of 2021(July-September) was low as you can see.
So when inflation numbers for summer of 2022 replaced 2021 inflation numbers for the most recent 12 months period, we expected inflation to be high, and mortgage rates would increase, which is exactly what happened.
However, starting October 2021, inflation numbers are higher, so when October 2022 inflation rates were released on November 10th , they were lower as expected. This had an immediate impact on mortgage rates as they improved significantly. I expect the same trend to continue for the following months, and we may have passed the peak of inflation. This means mortgage rates will improve over time and even quite meaningfully in the next few months, giving home owners opportunities to refinance.
Be aware though, as rates improve there will be more buyers coming back into the market creating more competition for properties.
This is one of the reasons why I think it is the right time now to be active in the market as a buyer.
So contact me if you are interested in any property and want to learn more about the current market.