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October 11, 2024
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October 11, 2024
Uncertainty Is Holding Us Back... What Will Move Mortgage Rates?
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Uncertainty is a killer! Mortgage rates have remained above 6.5% and will likely stay there until at least after the election.
Right now, the markets are dissecting every piece of financial news with a microscope. It’s about two things: jobs and inflation. At this point, it’s a report-by-report cycle, with each report taking on more significance than it probably should.
This week was inflation week. Inflation came out a little higher than expected but not all bad. At least it didn’t derail progress.
The reality is that the economy is not overheated, and inflation is not out of control. It’s just a matter of convincing Wall Street traders that conditions are stable. This may take months before they feel comfortable with lower rates.
It’s likely that the only thing that could bring rates down fast would be something like a recession. If a recession were to occur, rates would probably drop pretty quickly.
On the real estate side, Altos Research reported that when rates were starting to approach 6%, it motivated buyers to jump in. Now that they have bumped back up over 6.5%, buyer activity is slowing down.
The 6% rate may be the tipping point to a more active real estate market. This shift is expected by the second quarter of 2025.
So... the moral of the story is that lower rates will likely bring more buyers into the market and push real estate prices higher. Buyers willing to jump in now, despite a slight spike in rates, can benefit.
They not only benefit from more stable home prices, but many are getting the seller to pay closing costs, and there aren’t nearly as many multiple offers. Waiting too long might mean missing the chance to have more control over the buying process.
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The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
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