Mortgage Rates Near 1-Year Highs

Interest rates are based on bonds. Because the bonds underlying the average mortgage are fixed rate, inflation is the enemy. Imagine you're an investor fronting the money for a fixed-rate mortgage. You know your schedule of payments from day one. Let's say the payment is $5 or enough to buy a dozen eggs.  Now let's say inflation raises the price of those eggs to $7. You're still only receiving $5 because you invested in a fixed-rate loan. Because of this dynamic, when inflation fears increase, investors demand higher rates of return. We're dealing with two inflation threats right now: one is specific and one is general. The specific threat is that of elevated fuel prices stemming from the Iran war. As the fighting picked back up in July, so have rates. Today's war headlines were j