flexiblefullpage - default
Currently Reading

What's Driving the Recent Spike in Mortgage Rates?


What's Driving the Recent Spike in Mortgage Rates?

The housing market appears to be cooling down in the wake of surging mortgage rates, but the Fed isn't backing off anytime soon

June 28, 2022
House model and white piggy bank on stack of cash
Image: Stock.adobe.com

Inflation is up to a 40-year high, and more gains are expected after the Federal Reserve upped its ante in May and June to rapidly cool an overheated market. As the Fed actively works to combat inflation, housing affordability is hurting, and buyers long outpriced and bogged down by tight competition are finally throwing in the towel.

While current buying conditions certainly seem bleak for those still house hunting, a slowdown in home sales is precisely on par with market expectations. As a result, home price growth is beginning to soften and sellers are slashing their asking prices, while for-sale homes are remaining on the market for an extended period of time compared to mid-pandemic peaks.

While they remain low by historical standards, for-sale inventory levels have risen. A slower pace of sales has resulted in more homes staying on the market for longer. New listing activity continues to lag behind recent years. 

It’s important to remember that while mortgage rates are certainly not the only reason why homeowners decide to move, they do factor into the equation, and for some potential movers, the prospect of giving up their current mortgage and taking on one with a rate that is nearly double their current one is enough to back out of the transaction.

Read more

Related Stories


Inflation Is Rising the Fastest in Sun Belt Cities—Here’s Why

Homebuyers who flocked to Sun Belt metros sent prices soaring throughout the pandemic, and rapid inflation is only exacerbating an existing affordability crisis

Community Development

These St. Louis Lawyers Created a Replicable Model for Neighborhood Renewal

The SmithNMTC corporation is revitalizing neighborhoods across the U.S. by using a federal tax credits program to finance affordable housing projects


What the Inflation Reduction Act Means for Home Builders

NAHB Policy Briefing: Now that the Inflation Reduction Act is law, home builders see a mix of benefits ... and drawbacks

boombox1 -
native1 - default

More in Category

native2 - default
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.