Barron's

Investors aren’t the only ones feeling the pain after the Federal Reserve’s outlook shook markets on Wednesday. Home buyers looking for a mortgage now will find higher rates than earlier this week.

Mortgage rates rose this week to 6.72% from 6.6% one week prior, according to Freddie Mac’s 30-year fixed rate data released Thursday. It’s the highest rate since late November and the largest increase since the end of October.

Investors’ focus on inflation means the 30-year fixed mortgage rate could head lower if consumer price data eases in coming months. “The mortgage rate will immediately respond to lower consumer price inflation,” Lawrence Yun, the National Association of Realtors® chief economist, said on a call with reporters Thursday. The Bureau of Labor Statistics will release its next read on consumer inflation on Jan. 15.

Inflation relief could come from housing services, Yun added. Economists have long been waiting for the category of the consumer price index measuring rents and rent-equivalents to ease as asking rents have cooled. The measure, which is known to lag private measures of new lease costs, rose more slowly in November than it did in October.

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