Why Are Mortgage Rates Still Rising? Here’s what we know.

Rising Mortgage Rates: What We Know

There has been a lot of talk about mortgage rates lately. Homebuyers are asking when the rates will drop, and many forecasts are attempting to answer. We thought we would share what we know.

First, what is a mortgage rate?

A mortgage rate is the rate of interest charged on a mortgage. Mortgage rates are determined by the lender and can be either fixed, staying the same for the term of the mortgage, or variable, fluctuating with a benchmark interest rate. Mortgage rates vary for borrowers based on their credit profile. Mortgage rate averages also rise and fall with interest rate cycles, drastically affecting the homebuyers’ market.

What is mortgage interest rate forecasting?

Experts predict how interest rates will increase or decrease in mortgage interest rate forecasting. You may have noted how rates have changed over the last couple of years.

What factors affect mortgage rates?


Mortgage rates and inflation go hand in hand. When inflation increases, interest rates rise to keep up with the dollar’s value. If inflation decreases, mortgage rates drop. During periods of low inflation, mortgage rates tend to stay the same or slightly fluctuate. It’s not an easy balancing act.

World Events

World events, such as the COVID-19 pandemic and the Russian conflict with Ukraine, affect mortgage interest rates. Throughout history, mortgage rates have been affected by World War II, the oil embargo in the 1970s and 1980s, the housing market crash in 2007, and Brexit, for example.

The Federal Reserve

The Federal Reserve (the Fed) affects short-term interest rates by increasing or decreasing them based on the economy to control the money supply. When the Fed tightens up the money supply, they raise interest rates on consumer borrowing, including mortgage rates. When the Federal Reserve makes it more expensive for banks to borrow due to a higher federal funds rate, the banks pass higher costs on to customers.  

Bond Prices

Mortgage interest rates go down as bond prices go up. As bond prices go down, mortgage interest rates go up. Mortgage lenders tie their interest rates closely to 10-Year Treasury rates. Mortgage rates increase or decrease depending on demand.

What does this mean for those looking to refinance or purchase a home?

We asked our CEO and Founder, Phil Jawny for some expert advice.
Phil told us that while this is a time of uncertainty, understanding the peaks and valleys of the market is where you can capitalize. Since the 2007-2008 housing market reform, the market has been more stable than ever. The level of scrutiny applied to a buyer’s ability to repay their loan is the highest it has ever been, leaving payment delinquency at an all-time low.
With home values rising constantly, homeowners have more equity in their homes than we’ve ever seen in American history.

Bottom Line:

If experts are correct and mortgage rates continue to increase throughout the year, you may not find a cheaper time to refinance.
If you’ve been planning to buy a home and have your finances in order, it may also be worth buying soon before rates have a chance to increase. By purchasing a home today rather than six months from now, you could save yourself tens of thousands of dollars in interest over the life of the loan.


Our team combines today’s technology with the personal guidance needed during the mortgage process, allowing for a smooth transaction and on-time closing. GoVA is proud to partner with TowneBank Mortgage, a Forbes top 10 bank. Together we focus on providing the knowledge, service, and confidence you need in your mortgage lender.

Are you a member of the military community? If so, you’ve earned these VA benefits, and the GoVA team is committed to being your partner on the path to homeownership and financial freedom. 

You served for us. Let us work for you.


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About Our Partnership with TowneBank Mortgage

At GoVA, we’re proud to partner with a lender that delivers peace of mind to those who have served and continue to serve our county. Together, GoVA and TowneBank Mortgage are committed to helping our military service members achieve their dreams of homeownership, as well as providing them with valuable resources along the way. As experienced lenders, TowneBank Mortgage understands the need for a quick and easy mortgage process, especially during life’s transitional moments. Headquartered in Norfolk, just miles from the world’s largest naval base, TowneBank Mortgage has had the honor of helping thousands of military families through their VA loan offerings. Their team is knowledgeable about VA products and the local market, and in-house operations allow them to respond to questions and concerns in a timely manner. Together, we can get you to closing in 30 days or less. Trust TowneBank Mortgage and GoVA loans to get you home.

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