## Will Mortgage Rates Continue to Increase?
Mortgage rates have been on a steady upward trend since the beginning of 2022. In January, the average 30-year fixed-rate mortgage was 3.22%. By June, it had risen to 5.78%. This represents a significant increase in monthly payments for homeowners and potential homebuyers.
There are a number of factors that have contributed to this increase in mortgage rates, including:
* **Inflation:** Inflation has been rising at its fastest pace in decades, and this has led to an increase in the cost of borrowing money.
* **Federal Reserve policy:** The Federal Reserve has been raising interest rates in an effort to combat inflation. This has made it more expensive for banks to borrow money, and this increased cost is being passed on to consumers in the form of higher mortgage rates.
* **Global economic conditions:** The war in Ukraine and the ongoing COVID-19 pandemic have created uncertainty in the global economy. This uncertainty has led to an increase in demand for safe-haven assets, such as U.S. Treasury bonds. This has pushed up the yield on Treasury bonds, and this has in turn led to higher mortgage rates.
The outlook for mortgage rates is uncertain. The Federal Reserve is expected to continue raising interest rates in the coming months, which will put upward pressure on mortgage rates. However, there are also some factors that could lead to a decline in mortgage rates, such as a slowdown in the economy or a resolution to the war in Ukraine.
### What does this mean for homeowners and potential homebuyers?
For homeowners, rising mortgage rates mean higher monthly payments. This can be a significant burden, especially for those who are on a tight budget. Homeowners who are considering refinancing their mortgages may want to do so sooner rather than later, before rates rise even further.
For potential homebuyers, rising mortgage rates mean that they will need to qualify for a smaller loan amount. This can make it more difficult to afford a home, especially in competitive markets. Potential homebuyers may want to consider saving for a larger down payment or looking for ways to increase their income.
### Tips for dealing with rising mortgage rates
If you are a homeowner or potential homebuyer, there are a number of things you can do to deal with rising mortgage rates:
* **Shop around for the best mortgage rate.** There are a number of different lenders out there, so it is important to compare rates before you make a decision.
* **Consider a shorter loan term.** A shorter loan term will result in a lower total amount of interest paid over the life of the loan.
* **Make extra payments on your mortgage.** This will help you pay down your principal balance faster and reduce the amount of interest you pay.
* **Refinance your mortgage.** If you have a good credit score and a low debt-to-income ratio, you may be able to refinance your mortgage at a lower interest rate.
Rising mortgage rates can be a challenge, but there are a number of things you can do to deal with them. By following these tips, you can minimize the impact of rising mortgage rates on your finances.
## Additional resources
* [Mortgage rates today](https://www.bankrate.com/mortgages/mortgage-rates/)
* [How to get a lower mortgage rate](https://www.consumerfinance.gov/ask-cfpb/how-can-i-get-lower-mortgage-rate-en-85/)
* [Mortgage refinancing](https://www.fanniemae.com/service/mortgage/understand-mortgage-process/refinance-mortgage)