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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 a team of real estate experts 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. A trusted real estate agent and mortgage lender can help you navigate through it. And with the right guidance, you can make informed decisions.

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.

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. A great agent will 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 your agent and a trusted lender) 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, your agent will 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. Their 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 an experienced real estate agent and a trusted lender, you’ll be ready to navigate the changes and make the most of the opportunities that come your way.

How Real Estate Agents Take the Fear Out of Moving

Feeling a bit unsure, or even afraid, to move with everything going on right now? The decision to move shouldn’t be scary, it should be exciting. And the best way to eliminate any fear is to work with a pro. 

Real estate agents are so much more than just transaction facilitators; they’re trusted guides to help you navigate the complexities of the housing market with confidence and ease. And a great agent can turn what may feel like a daunting process into a manageable—and even enjoyable—experience.

That’s why, in a Bright MLS survey, respondents agreed partnering with an agent is essential and helps cut down on their stress:

a blue pie chart with white textHere are just a few examples of why that expertise can give you so much peace of mind.

1. Explaining the Current Market

You may be seeing misleading headlines about a potential market crash, falling prices, and more. And when you’re not an expert yourself, it’s easy to get swept up in the clickbait and let that scare you. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

A real estate agent is there to help you separate fact from fiction and to debunk any headline that does more to terrify than clarify. With their deep understanding of local market trends, home values, inventory levels, and more, they’ll help you feel more confident in your decision.

2. Walking You Through the Process Step-by-Step

Is this your first time going through the process as a buyer or a seller? Don’t worry. Your agent will walk you through every step along the way, from the initial conversation all the way to closing day. As NerdWallet explains:

“If it’s your first time buying — or selling — you’re likely to come across terms you don’t recognize and tasks that seem baffling. What’s the difference between pending and contingent? Why do you need title insurance? How thoroughly do you need to fill out disclosure forms? Your agent should be able to confidently and competently explain it all.”

And if you’ve done this before, but it’s been a while, an agent will tailor how they explain it all to your previous experience. They won’t bog you down with details, they’ll only give you as much of a refresher as you want and need.

 3. Advocating for Your Best Interests

Does the thought of dealing with the back and forth of the transaction make your palms sweaty? Put that anxiety aside. Your agent is a skilled negotiator trained for these exact scenarios. And the best part is, they work for you. So, it’s your goals they’re using that expertise to fight for.

They’ll work to secure the best possible terms for you, whether it’s getting a better price as a homebuyer or negotiating a higher sale price as a seller. This removes the fear of a bad deal or being taken advantage of during the process.

4. Solving Any Unexpected Problems Quickly

Worried something is going come up that you don’t know how to handle? Rest assured, your agent has you covered.

Agents are skilled problem-solvers. They not only address issues, but they get ahead of them before they become deal-breakers – and that helps keep the process on track. So, if any challenges do pop up, know your agent has the skills and experience necessary to find a solution that works for you.

Bottom Line

Don’t let fear or uncertainty hold you back from achieving your goals. With an expert agent by your side, you can move forward with confidence. 

Avoid These Top Homebuyer Mistakes in Today’s Market

No one likes making mistakes, especially when they happen in what’s likely the biggest transaction of your life – buying a home.

That’s why partnering with a trusted agent is so important. Here’s a sneak peek at the most common missteps buyers are making in today’s market and how a great agent will help you steer clear of each one.

Trying To Time the Market

Many buyers are trying to time the market by waiting for home prices or mortgage rates to drop. This can be a really risky strategy because there’s so much at play that can have an impact on those things. As Elijah de la Campa, Senior Economist at Redfin, says:

“My advice for buyers is don’t try to time the market. There are ​a lot of swing factors, like the upcoming jobs report and the presidential election, that could cause the housing market to take unexpected twists and turns. If you find a house you love and can afford to buy it, now’s not a bad time.”

Buying More House Than You Can Afford

If you’re tempted to stretch your budget a bit further than you should, you’re not alone. A number of buyers are making this mistake right now.

But the truth is, it’s actually really important to avoid overextending your budget, especially when other housing expenses like home insurance and taxes are on the rise. You want to talk to the pros to make sure you understand what’ll really work for you. Bankrate offers this advice:

“Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations.”

Missing Out on Assistance Programs That Can Help 

Saving up for the upfront costs of homeownership takes some careful planning. You’ve got to think about your closing costs, down payment, and more. And if you don’t work with a team of experienced professionals, you could miss out on programs out there that can make a big difference for you. This is happening more than you realize.

According to Realtor.com, almost 80% of first-time buyers qualify for down payment assistance – but only 13% actually take advantage of those programs. So, talk to a lender about your options. Whether you’re buying your first house or your fifth, there may be a program that can help.

Not Leaning on the Expertise of a Pro

This last one may be the most important of all. The very best way to avoid making a mistake that’s going to cost you is to lean on a pro. With the right team of experts, you can easily dodge these missteps.

Bottom Line

The good news is you don’t have to deal with any of these headaches. Connect with a local real estate agent so you have a pro on your side who can help you avoid these costly mistakes.