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What's Behind Today's Mortgage Rate Volatility
What’s Behind Today’s Mortgage Rate Volatility? If you’ve been keeping an eye on mortgage rates lately, you might feel like you’re on a roller coaster ride. One day rates are up; the next they dip down a bit. So, what’s driving this constant change? Let’s dive into just a few of the major reasons why we’re seeing so much volatility, and what it means for you. The Market’s Reaction to the Election A significant factor causing fluctuations in mortgage rates is the general reaction to the political landscape. Election seasons often bring uncertainty to financial markets, and this one is no different. Markets tend to respond not only to who won, but also to the economic policies they are expected to implement. And when it comes to what’s been happening with mortgage rates over the past couple of weeks, as the National Association of Home Builders (NAHB) says: “. . . the primary reason interest rates have been on the rise pertains to the uncertainty surrounding the presidential election. Although the election is now complete, there continue to be growing concerns over budget deficits.” In the short term, this anticipation has caused a slight uptick in mortgage rates as the markets adjust and react. Additionally, factors like international tensions, supply chain disruptions, and trade policies can drive investor sentiment, causing them to seek safer assets like bonds, which can indirectly impact mortgage rates. Essentially, the more global or domestic uncertainty, the greater the chance that mortgage rates may shift. The Economy and the Federal Reserve Inflation and unemployment are two other big drivers of mortgage rates. The Federal Reserve (the Fed) has been working to bring inflation under control, and has been closely monitoring the economy as they do. And as long as inflation continues to moderate and the job market shows signs of maximum employment, the Fed will continue its plans to cut the Federal Funds Rate. Although the Fed doesn’t set mortgage rates, their decisions do have an impact, and typically a cut leads to a mortgage rates response. And in their November 6-7th meeting, the Fed had the data they needed to make another cut to the Federal Funds Rate. And while that decision was expected and much of the mortgage rate movement happened prior to that meeting, there was a slight dip in rates. What To Expect in the Coming Months As we look ahead, mortgage rates will respond to changes in the Fed’s policies and other economic indicators. The markets will likely remain in a wait-and-see mode, reacting to each new development. And, with the transition of a new administration comes an element of unpredictability. A recent article from The Mortgage Reports explains: “Today’s economic indicators come with mixed pressures on mortgage rates and we’re likely to be in for a good amount of volatility as markets adjust and respond to the election . . .” The best way to navigate this landscape is to have my team by your side. Professionals will help you understand what’s happening and can provide you with the guidance you need to make informed housing market decisions along the way. Bottom Line The takeaway? Today’s mortgage rate volatility is going to continue to be driven by economic factors and political changes. Now is the time to lean on experienced professionals. I can hook you up with a couple of GREAT lenders, and a good mortgage lender can help you navigate through it. And with the right guidance, you can make informed decisions.
The Big Difference Between Renter and Howeowner Net Worth
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Expect the Unexpected: Anticipating Volatility in Today's Housing Market
Expect the Unexpected: Anticipating Volatility in Today’s Housing Market You’ve probably noticed one thing if you’re thinking about making a move: the housing market feels a bit unpredictable right now. The truth is, from home prices to mortgage rates, we’re seeing more volatility – and it’s important to understand why. At a high-level, let’s break down what’s happening and the best way to navigate it. What’s Driving Today’s Market Volatility? Factors like economic data, unemployment numbers, decisions coming out of the Federal Reserve (The Fed), and even the presidential election, are creating uncertainty right now – and uncertainty leads to market volatility. You can see that when you look at what’s happening with mortgage rates. New economic reports and other geopolitical events have an impact and can cause sudden shifts up or down, even though experts still forecast rates will come down overall. We’ve seen that effect play out recently, like when employment and inflation data get released each month. And as the markets react, these types of updates will continue to have an impact on rates moving forward. As Greg McBride, CFA, Chief Financial Analyst at Bankrate, says: “After steadily declining throughout the summer months, I expect more ups and downs to mortgage rates . . . Job market data will be closely watched as well as any clues from the Fed about the extent of upcoming interest rate cuts.” This is exactly why the projected decline in mortgage rates isn’t going to be a straight line down over the next year. As Hannah Jones, Senior Economic Research Analyst at Realtor.com, explains: “Rates have shown considerable volatility lately, and may continue to do so . . . Overall, we still expect a downward long-term mortgage rate trend.” Plus, home prices and the number of homes on the market vary dramatically depending on where you’re looking to buy or sell, which makes it even harder to get a clear picture. In some areas, home prices are rising and inventory is tight, while in others, there are more homes available and it’s leading to more moderate pricing shifts. As all of this unfolds, understanding what’s happening will help you make the right decisions, whether that’s buying or selling. And there’s one easy way to get that information: from a professional like me. The Importance of Partnering with a Pro While the road ahead may have some bumps and unexpected turns, you don’t have to go it alone. I can hep to keep you up to date on the latest market developments, guide you through any shifts, and help you make smart decisions based on your goals. For example, as mortgage rates change, professionals (like me and the lenders I work with) will explain how the shifts impact what you can reasonably plan for in your monthly payment. This will help you see how even a small change in rates can impact your bottom line – that way you don’t lose sight of the big picture even as shifts happen here and there. And since conditions can vary significantly from one neighborhood to another, I can also help you understand the specifics of your market—whether it’s how to navigate competition with other buyers, the number of homes available, or what’s happening with local home prices. My insights and expertise will help you adapt to any movement in the market. Bottom Line The housing market may be experiencing some shifts, but don’t let it stop you from making your move. With the support of my lenders, support staff and me, you’ll be ready to navigate the changes and make the most of the opportunities that come your way. Let’s turn any uncertainty into your advantage, helping you move forward with confidence.