Mortgage Rates are Still a Mixed Bag, Say Experts

No clear answer as to direction, nationwide
Published on Jul 7, 2022

As Fed interest rates inched higher in recent weeks, that’s not a direct indication of where mortgage rates are headed, say a host of mortgage experts. In fact, opinions vary across the map.

According to a recent poll in Bankrate, about 37.5 percent of experts polled say that rates are going up, while 25 percent say rates are going down,  and another approximately 37.5 percent say rates will remain the same. This is while Pasadena’s real estate market remains strong with no current visibly dramatic shifts in direction, with or without higher rates.

“The Fed has lobbed the first verbal volley on inflation,” said Derek Egeberg, Academy Mortgage, “but promised nothing, and they’re sticking to the ‘inflation is transitory’ story. As long as market participants buy that, it’ll keep rates low. But should doubts creep in, hold on to your hat.”

And according to Freddie Mac, The average 30-year fixed interest rate fell from 5.81% on June 23 to 5.70% on June 30, while interest rates grew nearly two and a half full percentage points (2.5%) since the start of 2022—owing to the Fed’s recent policy changes to combat the country’s high inflation rate. However, rates dipped again this past concerns over a possible upcoming recession brought rates down this past week. 

Rates could drop further if those concerns persist, according to

But Doug Duncan, chief economist at Fannie Mae, had a completely different view earlier this week, saying, “The Fed will raise their rate at least 50 basis points and possibly another 75 in July, and I think they’ll raise it again in September. Depends on what they see in the market between now and then.”

 with the inflation measures. Mortgage rates are going to be at least at 6 percent. 

Markets are efficient and will adjust for the available information,” he continued. “Interest rates will go up until the market perceives something’s broken, and there’s going to be a recession, and then they’ll start going down when the Fed eases.”

The average 30-year fixed-rate mortgage ended the first quarter of 2022 at 4.67%, according to Freddie Mac. Obviously, each percentage in rate change can mean dramatic changes in a homebuyer’s monthly mortgage payment.

An aerial view of the mortgage landscape this week shows major housing authorities with a relatively wide range of rate predictions for the third quarter of 2022, with Freddie Mac foreseeing a 4.8 rate, and Fannie Mae predicting 5.0%.

The National Association of Home Builders, meanwhile, spots the rate at 5.05%, the Mortgage Bankers Association calls it 5.10%, and the National Association of Realtors pegs the rate at 5.20%.

Wells Fargo had the darkest prediction for the coming months, saying that September could bring rates of 5.85%. 

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