High Inflation and Rising Interest Rates Affecting the Housing Markets

In January, 2022, Consumer Inflation increased 7.5% being the highest rate of increase in 40 YEARS (since 1982). Nationwide, inflation of goods has been sweeping American markets and other countries mainly because of the pandemic supply shortages related to stock / reserves inventory and unprecedented labor shortages across multiple industries. Regarding the housing markets, it’s happening in the mortgage/banking industry as well. It’s now pushing a 4% national average; as of Feb 10, 2022, the national average 30-year fixed mortgage APR is 3.990%. The average 15-year fixed mortgage APR is 3.430%, according to Bankrate’s latest survey of the nation’s largest mortgage lenders. The Federal Reserve had begun raising interest rates by 0.25% in increments.

High Inflation and Rising Interest Rates Affecting the Housing Markets


This can actually be a good thing for the housing markets. Because of such historically low interest rates in 2020 & 2021 and less people selling their homes due to pandemic fears & lockdowns, there was a major lack of inventory and a huge buyer demand with borrowers willing to outbid each other ABOVE market value while also being in competition with real estate investors and iBuyer companies being able to afford to purchase with cash or hard money instead of mortgage loans. That type of market condition created a Sellers Market that was good for selling on a “hot market” for bigger equity cashouts due to price spikes and high demand; but not really such advantageous market for buyers who were having to shell out more money for a home despite the lower mortgage rates triggered by cost of credit Fed adjustments. In this higher interest rate housing market, one would hope it will stabilize the home purchase demand to prevent “bidding wars” and OVER-inflated home prices creating a volatile housing crisis… In Jan 2022, the US Bureau of Labor Statistics reported a +4.4% increase in shelter/housing prices.


For the latest updated information on consumer pricing / labor statistics and commodities, please refer to the websites like and other reliable official sources.

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