30-Year Fixed Mortgage Rate Soars

The Pain

Mortgage rates have increased at a breakneck pace in recent weeks, with the 30-year Mortgage Rates leaping from 5.05 percent on August 1st, 2022, to 6.28 percent today. The release of today's inflation statistics has added pressure on people considering purchasing a home as interest rates continue to rise.

A Silver Lining

Although 30-year mortgage rates have risen recently, try to keep it in perspective. For context, during the 1980s, these rates hovered around 10%; since 1971, they've averaged 7.8%. So even if hikes look sizable now, the current rate is still more than 1% below its historical mean.

The recent rise in 30-year mortgage rates is due to rising inflationary pressures. The inflation print released today showed that inflation is running at a much higher-than-expected pace, which has put upward pressure on short and long-term interest rates. However, it's important to keep in mind that inflationary pressures are expected to abate in the coming months, which could lead to a decline in mortgage rates.