Will rates go up at the end of June?

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  • Inflation affects mortgage rates; when inflation rises, mortgage rates also tend to increase.
  • Inflation increased in May, but the US is likely to need longer term adjustments before mortgage rates react.
  • However, the Federal Reserve meets this week, so mortgage rates could rise if the board of directors decides to raise the federal funds rate.
  • See A Selection Of The Best Mortgage Lenders Insider »

Inflation This is a hot topic right now because it can affect many aspects of our lives, including mortgage rates for people who buy houses.

Inflation significantly affects mortgage rates. When inflation is high, rates also tend to be high. Inflation has been low for over a year during the coronavirus pandemic, so mortgage rates have also been low.

The latest report from the U.S. Bureau of Labor Statistics shows that inflation skyrocketed in May… Economists had expected it to rise 0.04%, but it was up 0.06%.

This happens after Growth of 0.08% in April, which also exceeded economists’ expectations.

So what does this mean for mortgage rates? Nothing yet.

Current mortgage rates

Tariffs from Money.com

You can see that even with higher inflation rates, mortgage rates have actually declined since that time last month. May rates have also remained virtually unchanged since mid-April, even as inflation rises.

Current refinancing rates

Tariffs from Money.com

You will notice similar trends with mortgage refinancing rates. Rates have remained low over the past two months, despite rising inflation.

Mortgage interest rate forecast

If inflation is high in the US for a few more months, mortgage rates could rise this year.

Why is inflation no longer causing mortgage rates to rise? Because some experts believe the jump is temporary, and the US needs to experience longer and more robust changes for mortgage rates to react.

One of the reasons inflation has soared over the past couple of months is that businesses are reopening after closing during the pandemic. So people are spending more and the demand for goods is growing. Inflation is likely to slow down as supply catches up with demand.

Inflation is also significantly higher than at this time last year, but this is probably because inflation was already low before the pandemic, so the current rise seems to be dramatic by comparison.

However

The federal reserve
will take place tomorrow and Wednesday, June 15th and 16th. Fed discusses federal funds rate (which affects mortgage rates) at these meetings. If the Fed decides that the current high inflation is sufficient reason to raise the federal funds rate, you can see the rise in mortgage rates Better sooner than later.

Mortgage and refinancing rates by state

Check out the latest rates in your state using the links below.

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington
West Virginia
Wisconsin
Wyoming

about the author

Laura Grace Tarpley is editor of Personal Finance Insider covering mortgages, refinancing, mortgage rates, and lending. She is also a Certified Personal Finance Faculty (CEPF). During her five years in personal finance, she has written extensively about ways to handle loans.

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