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Whitelaw and Sons Real Estate Morgan Hill
Whitelaw and Sons Real Estate Morgan Hill

Mortgage Rates About To Explode In 2022!

by Jul 18, 2022Real Estate Realities Podcast/Vidcast0 comments

Mortgage Rates About To Explode In 2022

Written by Robert Whitelaw, Realtor®/Broker/Owner

Born and raised in Silicon Valley, Robert has helped clients successfully buy, sell and invest in real estate from Palo Alto to Gilroy and Los Gatos - and beyond! Robert rates his success on providing the highest level of value to his clients.

July 18, 2022

Unexpected inflation growth will feed a dramatic increase in interest rates – which will result in a huge jump in mortgage rates.

Mortgage ratesWhy do mortgage rates need to go up so much?

Inflation is the main reason that economists have to raise interest rates. Increasing the interest rate should reduce inflation.

Why do you expect mortgage rates to make such a big jump?

What is being done now, is not working.

The bottom line is that a huge hole has been dug that has gotten us into this crazy inflation. The solution is going to take a much bigger jump in interest rates to even come close to dealing with the problem.

But what about what many believe is an upcoming recession?

Interest rates need to go down to fight a recession.

Right now, we are facing inflation. However, once recession begins, we will likely see a point where the Fed will reduce rates to fight recession. I do not believe that anyone should expect a return to 3% interest rates for a very long time…. perhaps not even in our lifetimes.

What a recessions causes.

Recessions are marked by rising unemployment, reduced retail activity, shrinking incomes and drops in manufacturing. All bad things for people trying to make ends meet – or pay their mortgage.

LINKS:

https://magazine.realtor/daily-news/2022/07/13/yun-bolder-fed-inflation-policy-may-catapult-mortgage-rates

 

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