Are you feeling a bit unsure about what is really happening with mortgage rates? That might be because you have heard someone say they are coming down. But then you read somewhere else that they are up again. And that may leave you scratching your head and wondering what is true.
The simplest answer is: that what you read or hear will vary based on the time frame they are looking at. Here is 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 are 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 is 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 will see a lot of peaks and valleys – some bigger than others. And when you use data like this to explain what is happening, the story can be different based on which two points in the graph you are comparing.
For example, if you are 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 is the right way to look at it?
The Big Picture
Mortgage rates are always going to bounce around. It is 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 have come down compared to last year. And if you are 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.
Bottom Line
Let’s connect if you have any questions about what you are reading or hearing about the housing market.
