What is Really Going On with Mortgage Rates?

Are you unsure about what is going on with mortgage rates? That could be because you heard someone say they were coming down. But then you read somewhere that they are back up. And this may leave you scratching your head, wondering what is true.

The simplest answer is that what you read or hear will differ depending on the time frame they are looking at. Here’s some information that can help clear up the confusion.

Mortgage Rates Are Volatile by Nature

Mortgage rates do not move in a straight line. There are too many variables at work for that to occur. Instead, rates fluctuate due to a variety of factors such as economic conditions, Federal Reserve decisions, and so on. That means they could be up one day and down the next, depending on what is going on in the economy and around the world in general.

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 only look at the beginning of this month to the present, you may believe that mortgage rates are on the rise again. However, comparing the most recent data point to the peak in October, rates have trended lower. So, what’s the right way to look at it?

The Big Picture

Mortgage rates are always going to fluctuate. It is simply how they work. As a result, you should not be overly concerned with small, daily changes. To truly understand the overall trend, zoom out and look at the big picture.

When you compare the highest point (October) to where rates are now, you can see that they have decreased from the previous 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

Bottom Line

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

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