Whats Really Happening with Mortgage Rates?

Are you feeling a bit unsure about whats really happening with mortgage rates? That might be because youve heard someone say theyre coming down. But then you read somewhere else that theyre up again. And that may leave you scratching your head and wondering whats true.

The simplest answer is: that what you read or hear will vary based on the time frame theyre looking at. Heres some information that can help clear up the confusion.

Mortgage Rates Are Volatile by Nature

Mortgage rates dont move in a straight line. There are too many factors at play for that to happen. Instead, rates bounce around because theyre 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 whats 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, youll see a lot of peaks and valleys some bigger than others. And when you use data like this to explain whats happening, the story can be different based on which two points in the graph youre comparing.

For example, if youre 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, whats the right way to look at it?

The Big Picture

Mortgage rates are always going to bounce around. Its just how they work. So, you shouldnt 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 theyve come down compared to last year. And if youre looking to buy a home, this is big news. Dont let the little blips distract you. The experts agree, overall, that the larger downward trend could continue this year. 

Bottom Line

Connect with a professional if you have any questions about what youre reading or hearing about the housing market.

Venessa James - Broker Associate    

ABR, ALHS, CHMS, MCNE, LUXE, SFR, SRS  

Platinum Experience Group - KW Professionals 

(281) 889-8292 platinumexperiencegroup.com

Integrity, Experience, Results