Are mortgage rates headed up?

Posted by Michael Oliver on Wednesday, June 14th, 2017 at 1:55pm

Today the Fed increased rates again for the fourth time since 2015 by 1/4 of a percent. While this is a small increase it is usually felt across the financial landscape as it is the main rate all others originate from. Will mortgage rates go up due to this? Maybe, however, we feel that the increase should not happen anytime soon. Inflation seems to be the real driver of higher rates as lenders are most concerned with their principle not being eroded as much as what the return is going to be on the loan. This being the case without inflation being very present in the economy currently mortgages rates should stay low for the near future. 

If and when (we think it is a matter of when not if) inflation does start to increase mortgage rates should rise in lock step. Mortgage rates (all lending rates) are historically low going back as far as 5,000 years and there is something else that is going on in the economy since the great recession to cause this. No one knows what it is or how it will play out, but it is safe to say mortgage rates have to go up from here as the economy continues to gain steam. 

If you would like additional info or like to discuss what we think will be happening in the Tucson real estate markets email us or call us today thanks!


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