What’s Going on With Mortgage Rates in 2023?

A 'For Sale' sign hangs in front of a home in Miami, Fla., on June 21, 2022. Joe Raedle/Getty Images

With the 2022 mortgage rate peaking at 7.12 percent and inflation at 6.5 percent by the end of December 2022, it was a tumultuous economic year.

The hot housing market slowed down in many markets primarily due to high mortgage rates. But what will 2023 bring for mortgage rates? Is there relief on the way?

Inflation Contributes to Mortgage Rates

The Federal Reserve sets a target interest rate assessed on the bank-to-bank level. This is the rate banks charge each other for loans or borrowed money. This charge is passed on to the consumer.