What's going on with mortgage rates?

Are you feeling a bit unsure about what’s really happening with mortgage rates? That might be because you’ve heard someone say they’re coming down. But then you read somewhere else that they’re up again. That probably leaves you scratching your head and wondering what’s true.

The simplest answer is: what you read or hear will vary day to day. So if you hear from a friend on Monday, they could be wrong by Thursday. Looking at the bigger picture will be more beneficial. Here’s some information that can help clear up the confusion.

Mortgage Rates Are Volatile by Nature

Mortgage rates don’t move in a straight line. There are too many factors at play for that to happen. Instead, rates bounce around because they’re impacted by things like economic conditions, decisions from the Federal Reserve, and so much more. That means they might be up one day and down the next depending on what’s going on in the economy and the world as a whole.

Take a look at the graph below. It uses data from Mortgage News Daily to show the ebbs and flows in the 30-year fixed mortgage rate since last October:

 

If you look at the graph, you’ll see a lot of peaks and valleys – some bigger than others. And when you use data like this to explain what’s happening, the story can be different based on which two points in the graph you’re comparing.

For example, if you’re only looking at the beginning of this month through now, you may think mortgage rates are on the way back up. But, if you look at the latest data point and compare it to the peak in October, rates have trended down. So, what’s the right way to look at it?

The Big Picture

Mortgage rates are always going to bounce around. It’s just how they work. So, you shouldn’t focus too much on the small, daily changes. Instead, to really understand the overall trend, zoom out and look at the big picture.

When you look at the highest point (October) compared to where rates are now, you can see they’ve come down compared to last year. And if you’re looking to buy a home, this is big news. Don’t let the little blips distract you. The experts agree, overall, that the larger downward trend could continue this year. 

How Changing Mortgage Rates Impact You

If you're looking to buy a home, you should knkow even a small change in mortgage rates can have a big impact on your purchasing power. These charts show how that can affect your monthly payment. 

The best way to navigate changing mortgage rates and make an informed buying decision is to rely on the expertise of a mortgage lender and your Realtor. 

Let’s connect if you have any questions about what you’re reading or hearing about the housing market.

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