Spring is in the air, flowers are popping up, but so... is inflation. And, that has interest rates heading back towards multi-decade highs. A year that started with so much optimism for lower rates has turned to dread as strong labor markets and rising inflation have been the story for 2024 so far.

All we can do is play the cards we're dealt! Here's the information you need to know to beat the market...

The average rate for a 30-year fixed rate conventional loan is back above 7%... hitting 7.02% on Friday, April 12th. Make sure you're signed up for our weekly Friday rate texts. It could make a HUGE difference in your homebuying decision. 

Inflation is heading the wrong way...

The consumer price index (CPI) rose 3.5% in March, higher than expectation of 3.4%.

Headline inflation numbers have now increased 2 months in a row and is higher than inflation reported in December 2023! 

We know that it will be a bumpy road to the Fed's 2% inflation target but back-to-back inflation increases start make rising inflation look more like consistent trend and less like a hiccup before heading back down.

As I said last week, the inflation reporting and jobs data we've seen so far this year make it very difficult for me to see rate cuts any time before September (if we're lucky).  

It's important to understand that the Fed rate hikes or rate cuts aren't the only thing that drive mortgage rates higher or lower. It's a little funky but mortgage rates move not just on Fed announcements but the expectation of what the Fed will do.

For example, the Fed hasn't hiked rates since July 2023. However, mortgage rates continued to head higher for months following that announcement... reaching  8.45% on October 17, 2023 because the expectation was that we may be seeing more hikes. 

Mortgage rates fell fast and hard at the end of 2023 as inflation fell and the markets expectations turned to rate cuts (one firm said there would be as many as 6 rate cuts in 2023).

With inflation heading back towards 4% and labor markets continuing to heat up, the expectation is now turning back to no rate cuts (and if market trends continue, even rate INCREASES) and that's causing mortgage rates to head higher.

Even the firm that predicted 6 rate cuts is now saying no cuts until September!

So, what does this mean for homebuyers?

If you are in the market to buy, buy ASAP!

I believe that we will see rates head back towards 8% (and potentially go even higher). Of course, I would love to be wrong, however:


The housing market remains fundamentally strong (and is a key driver of inflation). The jobs market is strong. Inflation seems to be heating up with no sign of slowing down without Fed intervention (whether through action or threats) and that intervention will cause interest rates to head higher. 

Waiting until later this year to buy, will likely end up affecting your home shopping budget AND increasing your monthly payment if interest rates head higher from here - which no one wants.

I HATE being the bearer of bad news, but the best we can do is use the information at hand to make decisions in today's market. The information that I've seen over the last several months is that the Fed's fight against inflation is not over and that fight will likely have a negative effect on interest rate in the next few months.

So again, if you're a homebuyer who is ready to buy in 2024, I suggest you look to buy as soon as possible to secure the lowest interest rate available.

The good news (or silver lining) is that once you do buy and rates head lower, we will be able to provide you with a low cost refi using our new Rate Rebound program (information below).

Of course I still always recommend looking to secure a 2-1 temporary buydown from your seller wherever possible to help offset those higher interest rates for the first 2 years.