Home borrowing costs continue to push higher squeezing many potential first-time homebuyers out of the market. The 30-year fixed-rate mortgage has nearly doubled since the beginning of the year to 5.81% ... highs not seen in almost 14 years. Since the start of 2022, home borrowing costs have seen their fastest increase since 1994. The 15-year rate has also doubled to 4.67%. Everyone's question is why?

Well, one big reason has been the spike on the inflation front. The recent inflation reading Consumer Price Index rose to 8.6%, the highest since 1981. This has caused bond prices to decline and yields to spike. When this occurs, home loan rates tend to increase. Also, the Federal Reserve is currently raising rates saying that the U.S. economy is strong enough to withstand the hikes. If an economy is strong, all borrowing costs usually rise.

For the time being, rates are elevated but could be topping out given such a quick rise in 2022. The Mortgage Bankers Association's Chief Economist Lawrence Yun recently said, "Mortgage rates are expected to end 2022 at 5.0%, and to decline gradually to 4.4% by 2024. Mortgage rates may top 5.5% for a few months but going to 6% looks unlikely."

Bottom line: The American dream is to own a home, a place you can call your own.

Long-term rates might have peaked at the recent Fed Meeting just like they did back in 1994 when the Fed last hiked rates by .75%. With additional homes coming to the market and rates having crested, now is a wonderful time to explore owning real estate.

Source: Mortgage Market Guide