For comparison, the benchmark 30-year fixed-rate mortgage was 3.17% just a year ago. Four weeks ago, the mortgage rate was 5.78%. Now it is 6.73%.
The inflation that the Federal Reserve has been attempting to curb has been high this year. Time.com reported that the consumer price index reached 8.5% in July. The inflation has been consistently raising mortgage rates throughout the year.
“Inflation is absolutely in the driver’s seat, particularly as it pertains to mortgage rates,” Odeta Kushi, deputy chief economist at First American Financial Corporation, told time.com. “Until we get some sustained evidence that inflation is beginning to recede, the upward pressure on mortgage rates will remain.”
According to Time, the softened demand for homes caused by high mortgage rates may be advantageous for some hopeful home buyers. While high mortgage rates hardly manifest bountiful buyers’ markets, the consequential softening demand for homes may lead to more opportunities to land a deal on an available home or additional concessions from an interested seller.
“It’s always a good time to buy a home, if that’s what is important to you,” Eileen Derks, head of mortgage at Laurel Road, told Time. “It’s just about doing your research and making good informed decisions.”