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Mortgage rates became slightly volatile toward the end of the week and even dipped slightly on Thursday. But they're still higher today than they were at the beginning of the week.
This marks yet another week of increases for mortgage rates. The average 30-year fixed mortgage rate has increased for six weeks in a row, according to Freddie Mac, and is now a full percentage point higher than it was a month ago.
High rates have some homebuyers wondering if they should put off their search until rates start to drop, which may happen later next year. But the silver lining of higher mortgage rates is that some of the power has been shifted back to buyers, meaning it's possible to get a better deal on a home now than when the seller's market was at its strongest.
"For those looking to buy for a long term or buyers that have been in the market for a while, don't overlook the opportunity of the current moment," says Robert Heck, vice president of mortgage at Morty. "We've seen price cuts become more common and inventory loosen in some markets, offering opportunity to those that had been unable to buy amid the hot markets earlier this year or in 2021."
Use our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments.
By plugging in different term lengths and interest rates, you'll see how your monthly payment could change.
Mortgage rates started ticking up from historic lows in the second half of 2021 and have increased significantly so far in 2022. More recently, rates have been relatively volatile.
In the last 12 months, the Consumer Price Index rose by 8.3%. The Federal Reserve has been working to get inflation under control, and plans to increase the federal funds target rate two more times this year, following increases at its last five meetings.
Though not directly tied to the federal funds rate, mortgage rates are sometimes pushed up as a result of Fed rate hikes and investor expectations of how those hikes will impact the economy.
Inflation remains elevated, but has started to slow, which is a good sign for mortgage rates and the broader economy.
When mortgage rates go up, home shoppers' buying power decreases, as more of their anticipated housing budget has to go toward paying interest. If rates get high enough, buyers can get priced out of the market completely, which cools demand and puts downward pressure on home price growth.
However, that doesn't necessarily mean home prices will fall — home values typically increase every year. They've just been increasing at a slower pace than what we've seen in the past couple of years.
It can be hard to know if a lender is offering you a good rate, which is why it's so important to get preapproved with multiple mortgage lenders and compare each offer. Apply for preapproval with at least two or three lenders.
Your rate isn't the only thing that matters. Be sure to compare both what your monthly costs would be as well as your upfront costs, including any lender fees.
Even though mortgage rates are heavily influenced by economic factors that are out of your control, there are some things you can do to help ensure you get a good rate:
