Mortgage rates have just hit a 12-year high – clocking at more than 5.5% in the last few weeks. It’s not where the rates are at that has me taking notice – it’s how quickly we got here. So, the million-dollar question is, will this trend continue, or will interest rates finally start to cool down? Hey there, Jenevieve Croall here with JLUX Homes. The start of 2022 hasn’t been good for inflation. While it’s not the worst we’ve ever experienced, these rapid inflationary pressures are starting to creep up to levels not seen since the early 1980’s. So, what does that mean? Well, apart from your weekly groceries costing a lot more, inflation puts upward pressure on interest rates. When inflation begins to escalate past the acceptable 2-3% per year range, the FED usually steps in with a range of economic actions to stabilize the economy. One such action is raising the official interest rate in which the Federal Reserve lends money. The banks and financial institutions then pass on this rate to you, the mortgage holder, making your monthly payment just that little bit more expensive. The FED has already increased rates for the first time since 2018, with another six more penciled in for the rest of 2022.I made a video back in February warning of imminent Fed increases and the subsequent rises in mortgage rates that were coming. So where do interest rates go from here? Well, almost everyone has been proven wrong in some way trying to predict how fast these rate increases have been coming. All we can say for sure, is the upward trend will continue. So, what effect does that have on house prices? This perfect storm of economic conditions also pushes your average house price up – the number of houses for sale is down while the demand has skyrocketed. Okay, enough of the bad news; there is a silver lining to situations like this. Firstly, if you’re in a position to buy, now is a great time to lock in an interest rate we might not see again for some time and pick up a property that is reliably accruing equity. Secondly, if you’re retiring or looking to downsize your home, selling is an excellent opportunity to cash out and take advantage of record housing prices.And finally, we’ve been here before, and an inflation rate of 8.5% is nowhere near the extraordinary highs of the 1980 recession, where inflation hit 13.5% and the mortgage rate a staggering 18.63% That’s it for today’s update. If you’re watching this and you want to make a move before interest rates go up, contact me so we can discuss your options for buying in today’s market. And as always, thank you in advance for your referrals.