How World Crisis Might Affect Interest Rates

If you’re like me,  you’ve been glued to the news the past few weeks. Changes in the world at large can often cause changes at home. From rising gas prices, food costs, and now- fluctuating interest rates things can seem uncertain. Many may have been planning to buy or sell a home this year but have read scary headlines about the future of the market. However, read on to see what’s next for 2022 home interest rates, how to navigate the current market and why now might be your time to sell.

World Conflict Leads to Falling Rates

Since the conflict in Ukraine started, interest rates have started to decrease. But why? According to Mortgage Reports, When [world conflicts] happen, investors usually place more capital into safer assets – like bonds or mortgage-backed securities (MBS). This leads to declining mortgage rates and the length of the conflict in the Ukraine will determine how much downward pressure gets applied.” Over the past month, mortgage application volume was essentially flat, according to the Mortgage Bankers Association. However, Odeta Kushi, deputy chief economist at First American, believes this decline will be both “temporary and short-term” and buyers will be back in full force.


Rising and falling interest rates are nothing new. According to CNBC, “Interest rates tend to decrease in times of precarious events, much like they did around the first Covid pandemic lockdowns.” Prior to the crisis in Ukraine, interest rates were on a steady and rising trajectory. However, when the crisis abroad began, we saw a sharp 1% decrease in rates. But often just as these rates fall, they start to rise again. As the conflict has continued we’ve seen rates start to rise again, reaching 4.33% for 30-year fixed-rate mortgages and 3.56% for a 15 year. 

Past Rates Perspective

While 4% or more may seem like a large number, and fear of changes in the market may be keeping many from finding their dream home, keep in mind that rates have climbed much higher over the last 40 years. In fact, even though current interest rates are rising they are still the lowest we’ve seen over the past 10 years!

According to TIME, new home buyers can benefit from low-interest rates to help offset rising home prices. The market always cools down in the winter, but many are already predicting another hot spring and summer market. If you’re thinking about selling or buying a home now may be the best time in all of 2022 to start the process. 

Check out this great chart by The Street to see how major events and rising rates have impacted the market over the years.

Still feeling unsure about rising rates? It’s always a great option to speak with a professional. Contact me today, I’d love to answer any and all of your questions.