How an Expert Can Help You Understand Inflation & Mortgage Rates

KCM • October 4, 2022

How an Expert Can Help You Understand Inflation & Mortgage Rates



If you’re following today’s housing market, you know two of the top issues consumers face are inflation and mortgage rates. Let’s take a look at each one.

Inflation and the Housing Market

This year, inflation reached a high not seen in forty years. For the average consumer, you probably felt the pinch at the gas pump and in the grocery store. It may have even impacted your ability to save money to buy a home.

While the Federal Reserve is working hard to lower inflation, the August data shows the inflation rate was still higher than expected. This news impacted the stock market and fueled conversations about a recession. It also played a role in the Federal Reserve’s decision to raise the Federal Funds Rate last week. As Bankrate says:

“. . . the Fed has raised rates again, announcing yet another three-quarter-point hike on September 21 . . . The hikes are designed to cool an economy that has been on fire. . .”

While their actions don’t directly dictate what happens with mortgage rates, their decisions have contributed to the intentional cooldown in the housing market. A recent article from Fortune explains:

“As the Federal Reserve moved into inflation-fighting mode, financial markets quickly put upward pressure on mortgage rates. Those elevated mortgage rates . . . coupled with sky-high home prices, threw cold water onto the housing boom.”

The Impact on Rising Mortgage Rates

Over the past few months, mortgage rates have fluctuated in light of growing economic pressures. Most recently, the average 30-year fixed mortgage rate according to Freddie Mac ticked above 6% for the first time in well over a decade (see graph below):


The mortgage rate increases this year are the big reason buyer demand has pulled back in recent months. Basically, as rates (and home prices) rose, so did the cost of buying a home. That pushed on affordability and priced some buyers out of the market, so home sales slowed and the inventory of homes for sale grew as a result.

Where Experts Say Rates and Inflation Will Go from Here

Moving forward, both of these factors will continue to impact the housing market. A recent article from CNET puts the relationship between inflation and mortgage rates in simple terms:

“As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.”

Sam Khater, Chief Economist at Freddie Mac, has this to say about where rates may go from here:

“Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, . . .”

While there’s no way to say with certainty where mortgage rates will go from here, there is something you can do to stay informed, and that’s connect with a trusted real estate advisor. They keep their pulse on what’s happening today and help you understand what the experts are projecting. They can provide you with the best advice possible.

Bottom Line

Rising inflation and higher mortgage rates have had a clear impact on housing. For expert insights on the latest trends in the housing market and what they mean for you, let’s connect.


Share this post

Is Buyer Demand Picking Back Up? What Sellers Should Know

By KCM • December 27, 2025
The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

Is There Really a “Best Day of the Year” to Score a Deal on a House?

By The Inner Circle • December 15, 2025
The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

How To Make Sure Your Sale Crosses the Finish Line

By KCM • December 12, 2025
How To Make Sure Your Sale Crosses the Finish Line If there was one simple step that could help make your home sale a seamless process, wouldn't you want to know about it? There’s a lot that happens from the time your house goes under contract to closing day. And a few things still have to go right for the deal to go through. But here’s what a lot of sellers may not know. There's one part of the process where some homeowners are hitting a road bump that’s causing buyers to back out these days. But don’t worry. The majority of these snags are completely avoidable, especially when you understand what’s causing them and how to be proactive. That’s where a great agent (and a little prep) can make all the difference. What’s Causing Some Buyers To Back Out The latest data from Redfin says 15% of pending home sales are falling through . And that’s not wildly higher than the 12% norm from 2017-2019. But it is an increase. That means roughly 1 in 7 deals today don’t make it to the closing table. But, at the same time, 6 out of 7 do. So, the majority of sellers never face this problem – and odds are, you won’t either. But you can help make it even less likely if you know how to get ahead. You might assume the main reason buyers are backing out today is financing. But that’s actually not the case. The most common deal breaker today, by far, is inspection and repair issues (see graph below): Here’s why that’s a sticking point for buyers right now: Buyers are already stretched thin from high prices and challenging mortgage rates, so they don’t have the appetite (or budget) for unexpected repairs. If they’re going to spend all that money, they want to get something that’s move-in ready. They don’t want to take on another high-cost project themselves. They have more homes to choose from, so if yours seems like a hassle or if you’re not willing to fix something, they can just move on. The sellers with the best agents have heard about this shift and they’re doing what they can to go in prepared. Enter the pre-listing inspection. What’s a Pre-Listing Inspection? It’s exactly what it sounds like. It’s a professional home inspection you schedule before your home hits the market. And while it’s not required, the National Association of Realtors (NAR) explains why it could be a valuable step for some sellers right now: “To keep deals from unraveling . . . it allows a seller the opportunity to address any repairs before the For Sale sign even goes up. It also can help avoid surprises like a costly plumbing problem, a failing roof or an outdated electrical panel that could cause financially stretched buyers to bolt before closing .” Think of it as a way to avoid future headaches. You’ll know what issues could pop up during the buyer’s inspection – and you’ll have time to fix them or decide what to disclose before you put your house on the market. This way, when the buyer’s inspector walks in, you’re ready. No surprises. No last-minute panic. No deal on the line. Is It Worth It? Generally speaking, a pre-listing inspection costs just a few hundred dollars. So, it’s not a big expense. And the information it gives you is invaluable. But before you make that investment, talk to your local agent. In some markets, it may not be worth it. And in others, it may be the best move you can make. It all depends on what’s happening where you are and what’s working for other local sellers. If your agent recommends getting one, they’ll also: Help you decide which issues to fix Prioritize repairs based on what buyers in your area are focusing on Connect you with trusted professionals to get the work done Ensure you understand local disclosure laws That small step could save your deal (and your timeline). Bottom Line So, if there was one simple step that could help make your home sale go according to plan, would you do it? If you’d rather deal with surprises on your terms (not with the clock ticking under contract), let’s talk about whether a pre-listing inspection makes sense for your house. It may be worth it so you can hit the market confident, prepared, and in control.
Show More