Mortgage Rates: Past, Present, and Possible Future

Interest Rates and Housing Market Updates

If you’re considering purchasing a home this year, you’re likely keeping a keen eye on mortgage rates. Given that these rates directly influence your home loan affordability—especially in today’s challenging market—it’s crucial to understand their historical trends, current standing, and potential future movements. Additionally, it’s vital to examine how mortgage rates correlate with inflation for a more comprehensive outlook.

Understanding the Recent Surge in Rates Freddie Mac has been monitoring the 30-year fixed mortgage rate since April 1971. They publish the findings of their Primary Mortgage Market Survey weekly, which compiles mortgage application data from various lenders nationwide (refer to the graph below):

If you focus on the right-hand side of the graph, you’ll notice that mortgage rates have seen a substantial increase since the beginning of the previous year. However, these current rates are still lower than the 52-year average. This is noteworthy because buyers have grown accustomed to rates ranging between 3% and 5% over the past decade and a half.

This context is essential as it clarifies why the recent rate hike may induce a sense of “sticker shock,” even though the rates are near their long-term average. While many buyers have adapted to the higher rates over the past year, a slight reduction would certainly be welcomed. To gauge the likelihood of this happening, it’s crucial to consider inflation.

What’s the Future Trajectory for Mortgage Rates?

The Federal Reserve has been actively striving to curb inflation since the early part of 2022. This is significant because there has traditionally been a correlation between inflation and mortgage rates (as illustrated in the graph below):

The graph demonstrates a consistent relationship between inflation and mortgage rates. When inflation experiences a notable shift (depicted in blue), mortgage rates tend to follow shortly thereafter (represented in green).

The circled area on the graph highlights the latest surge in inflation, with mortgage rates trailing closely behind. However, as inflation has somewhat stabilized this year, mortgage rates have yet to adjust accordingly.

If past trends are any indication, the market is likely anticipating a downward adjustment in mortgage rates in line with the recent moderation in inflation. While it’s impossible to predict with certainty, the easing of inflation could signify that mortgage rates may decrease in the near term, aligning with established patterns.

Bottom Line

To make informed decisions about future mortgage rates, it’s beneficial to examine their historical trends and relationship with inflation. If this longstanding correlation continues to hold, the recent dip in inflation could spell positive news for upcoming mortgage rates and your home-buying aspirations. If you would like more information on current mortgage rates and programs, reach out to Countryside Homes NJ and RE/MAX Select, and let’s explore your options.

Client Testimonials for Countryside Homes NJ

At Countryside Homes NJ and RE/MAX Select, we pride ourselves on delivering exceptional service to our clients. But don’t just take our word for it—read what our satisfied customers have to say. From first-time homebuyers to seasoned real estate investors and new home builders, our clients appreciate our dedication, expertise, and commitment to their success. Here are some of their stories.

David R. New Homeowner

Collaborating with Keith LaBrunda and Heather Montalbano from Countryside Homes NJ and RE/MAX Select streamlined the home-buying process for me. They were attentive to my needs and preferences, ensuring they understood exactly what I was seeking in a home and what was within my financial comfort zone. Keith and Heather provided invaluable assistance during the offer stage, sharing insightful details that enabled me to place a successful bid on my desired property. They recommended associates to assist me with securing a mortgage, conducting home inspections, and acquiring homeowner's insurance. Post-purchase, they continued to be a resource, suggesting local companies to contact for internet, water, waste management, oil, and other essential services. The experience of purchasing a home with Keith LaBrunda and Heather Montalbano was seamless and enjoyable.

Rachel and Andre First Time Homebuyer

As first-time homebuyers, the process of finding and purchasing a home felt daunting. But from the moment we reached out to Heather and Keith at Countryside Homes NJ and RE/MAX Select, our worries were put to rest. Their team was incredibly patient, answering all our questions and guiding us through every step. They took the time to understand our needs and preferences, ensuring that we found the perfect home in a neighborhood we love. We were especially impressed by their vast knowledge of the local market and their commitment to ensuring we got the best deal possible. We can't thank them enough for making our dream of homeownership a reality. If you're in the market for a new home, we highly recommend Heather and Keith at Countryside Homes NJ and RE/MAX Select. They truly go above and beyond for their clients!

Prestia Family New Homeowners

From the moment we began our home search, Heather at Countryside Homes NJ and RE/MAX Select stood out as the epitome of professionalism and dedication. Her team's in-depth knowledge of the Rockaway Borough area and their unwavering commitment to our needs made our home buying journey not only smooth but truly enjoyable. As new homeowners in Rockaway Borough, NJ, we can confidently say that choosing Heather at Countryside Homes NJ and RE/MAX Select was the best decision we made. Her expertise, patience, and genuine care for our family's needs transformed what could have been a stressful process into a memorable and joyous occasion. We are beyond grateful for her support and would highly recommend her and her team to anyone looking to find their dream home. Thank you for turning our dreams into reality!