Preliminary indicators show that inflation has slowed a bit in the previous couple of months, but this isn’t affecting how the Federal Reserve is approaching future interest rate hikes. This means higher rates on many mortgage types, and could mean elevated home prices for the foreseeable future.

To help offset rising inflation, the Federal Reserve has been raising rates steadily – four times this year to be exact. While these hikes don’t directly affect mortgage interest rates, they do indirectly influence them, with the average 30-year fixed rate topping 6 percent. As of this past June, we have seen monthly mortgage payments go up roughly 54% versus the previous year.

Current housing market impact

CoreLogic reports that home prices have risen a little over 15% year-over-year. While that is a slowdown, it is historically high, and that is not being helped by inflation. Sellers and buyers alike feel less optimistic about their prospects.

“With home prices expected to moderate over the forecast horizon and economic uncertainty heightened, both homebuyers and home sellers may be incentivized to remain on the sidelines—homebuyers anticipating home price declines and potential home sellers not keen to give up their lower, fixed mortgage rate—contributing to a further cooling in home sales through the end of the year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in a statement.

Is there benefit in waiting?

Is this the time to sell your home or buy a new one? There’s nothing wrong with waiting, especially if you are a first-time homebuyer. You would lose out on building equity, but you may find yourself in a better position in the future, when the market cools off and you have more assets for a larger down payment or are in a better space financially.

Your circumstances might be that you have to buy a house now, maybe you don’t want to rent for another year or are moving for employment or need to upgrade. There’s still value in buying a home now, even this close to what could be the peak, you should just plan on staying in the home for a while if you want to be on top when it comes time to sell.

From the seller’s perspective, the tide is starting to turn. Some markets are seeing fewer overall buyers, or buyers in a situation where they have to lower their price. If you are selling your own home, you will likely find yourself in a market with elevated prices and fewer options.

If it is your intent to purchase now, try making the most of your money by:

· Putting your assets in a high-yield account: An upside to inflation and the response from the Fed is that we are seeing higher interest rates on savings accounts. Put the money you have saved up for down payment and closing costs into one of these high-yield accounts. Just make sure that you are able to access the funds easily when it comes time to move forward.

· Considering a mortgage lender with low or no fees: A high rate environment means this isn’t always easy to find, especially from your own bank, as they typically charge higher fees. Many non-bank and online lenders don’t have these higher fees, so you could find access to less expensive options.

·Locking in your rate: Once you are under contract, talk to a lender about locking in your interest rate. An attractive option today could be gone tomorrow with the way the market is working.