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Mid-Year 2022 Mortgage Rate Update

30 Year Fixed Rate Mortgages started the year in the 3.25% range and by the 1st of July rates had risen to over 5.50%, that’s quite an increase and unusual.


Typically when Mortgage Rates Increase they go up by about 1% and then level off for a while but not this time. Of course, we had never seen 30 Year Fixed Rate Mortgages at the historic lows of 2020 and 2021, with rates dipping into the 2’s for a time, so a move higher to more a traditional level is not that unusual.


For a little historical perspective here’s a chart showing a history of mortgage rates.


What’s caused mortgage rates to increase? The primary reason rates have increased so much is inflation. Mortgage rates hate inflation because it lowers the value of the return investors are getting for their investment. You might think of it this way. If I’m the holder of a mortgage note and getting paid at 3% and inflation is at 8% (the current pace for 2022) then I’m really losing 5% on an annual basis so I need to increase the rates I charge on new loans I make to offset some of the effects of inflation.


So what’s next? Well, no one is 100% sure but it looks like mortgage rates might stay right where they are, at least for a few months, and then the market will watch and see if inflation settles down and allows mortgage rates to drift a little lower.


Here’s what we do know, if you need help with any mortgage related question we’ll put our 35 years of experience to work for you. We’re happy to answer your questions and help you explore your options. With that in mine, we are always searching for solutions and the best rates and products we can find to help you with your home loan needs.


If I can be of help please e-mail me or call me at my office 818-952-2726 x 305.


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