Inflation and mortgage rates

[Zoe]

Inflation is on the climb which will make it hard for the new Fed Reserve Bank chairman to cut fed funds borrowing rate to banks.

It could have an impact on fixed rate mortgages for affordable housing loans.

U.S. Inflation Rates by Year: Historical Data (1914–2026)

U.S. inflation rates by year show how consumer prices have changed annually based on the Consumer Price Index (CPI) published by the Bureau of Labor Statistics (BLS). The table below provides historical U.S. inflation rate data from 1914 through 2026, allowing readers to compare yearly inflation...

www.usinflationcalculator.com

It will slow demand for consumers to make moves due to inflation and mortgage rates probably the rest of this year. In other words, it will not be a driving force for refinance loans or new mortgage loans.

https://moneywise.com/news/economy/inflation-wages-paychecks-budget-belt-tightening-2026

 

[Zoe]

https://moneywise.com/news/economy/inflation-wages-paychecks-budget-belt-tightening-2026

"She told MarketWatch that she's seeing members stash their money in checking accounts to prepare for higher costs. "The rest of the year will be about belt-tightening," she said, as many Americans deal with flat or slightly negative pay (when adjusted for inflation).

But this isn't the case for everyone. In the current K-shaped economy, high-income households continue to accumulate wealth (thanks in part to high stock market returns) while middle- and lower-income households struggle financially as inflation outpaces wage growth.

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For example, middle-income households may find that any bump in pay is neutralized by their decreasing purchasing power, while those making less than $50,000 fall further behind.

But for many middle- and lower-income households, inflation has been growing faster than after-tax wages since January 2025, according to Bank of America data. And, in 2025, nearly a quarter of all households were estimated to be living paycheck to paycheck "