Higher Mortgage Rates Create Favorable
Reverberations for Commercial Real Estate
Mortgage rates surge to a pandemic-era high. Following a steady but mild ascent at the end of last year, the growth trajectory of the 30-year mortgage rate became much more extreme in January. The rate climbed more than 40 basis points over the span of a few weeks to the mid-3 percent range, nearly realigning with the late 2019 measure. Upward movement is likely to continue in the coming months amid indications that the Federal Reserve will attempt to reign in record-level inflation. A higher cost of borrowing is already altering potential homebuyers’ decision making. The four-week moving average of mortgage purchase applications dropped 12.6 percent relative to the volume a year ago.