Recent data shows a downward trend in the inflation rate, suggesting that the Federal Reserve may adjust its policies to reflect this change, thereby influencing mortgage interest rates.

Over the past year and a half, the Federal Reserve has been taking aggressive measures to curb inflation, including raising short-term interest rates.

This approach has led to an increase in mortgage interest rates, although mortgage rates are not directly influenced by the Federal Reserve rates, they typically experience indirect effects.

However, the latest release of the Consumer Price Index shows that the inflation rate dropped from 3.7% in the previous month to 3.2% in October, indicating that the Federal Reserve's measures may be starting to take effect.

If the inflation rate continues to decrease, the Federal Reserve may consider maintaining stable rates or even implementing interest rate cuts, which could keep mortgage interest rates stable or slightly lower.

Meanwhile, mortgage interest rates have recently started to decline, with reports indicating that the average mortgage interest rate for a 30-year fixed-rate loan has dropped to 7.4%, below previous levels. This trend brings some relief to homebuyers who are currently searching for homes and feeling concerned.

Lawrence Yun, Chief Economist at the National Association of Realtors, stated that as inflation comes under control, mortgage interest rates are significantly decreasing, and he expects them to potentially fall to around 6% by next spring.

However, the inflation rate remains higher than the Federal Reserve's target of 2%, indicating that the Federal Reserve may still consider raising rates in the future.

Higher rates often raise concerns about economic recession, something the Federal Reserve has been working to avoid. Generally, the Federal Reserve lowers rates during periods of economic turbulence to stimulate economic growth.