Houston First Time Home Buyers Understanding The Recent Mortgage Rate Volatility
Created by Diana for First Home Houston
Hello there! We hope you’re having a great day. Today, we are sharing a bit about the cause for the recent mortgage rate volatility and what to expect in the coming months. Like most first time home buyers, you may be keeping an eye on mortgage rates as you ready yourself to purchase your new home. You may have also noticed, that one day rates are up and the next day they are down a bit. What’s driving this constant change?
The first is, the market’s reaction to the recent election. Election, as you know, bring uncertainty to the financial market, by not only responding to who wins but to all the new economic policies expected to be implemented by the new administration. In addition, tensions overseas, and domestic trade policies does indirectly impact mortgage rates as well. Essentially, the more uncertainty, both global and domestic, the more volatility mortgage rates will experience.
Another reason for the volatility is the economy and the Federal Reserve action. Inflation and unemployment are two drivers of mortgage rates. Although the Federal Reserve does not set mortgage rates, their decisions does impact mortgage rates. Typically a cut in rates will often leads to a dip, regardless of how slight, in mortgage rates.
That said, in the coming months, we think mortgage rates will continue to respond to changes in the Federal Reserve’s policies, along with other economic indicators. We also expect to be in a wait and see mode, with a touch of unpredictability, with the transition of the new administration. At this point, I think it’s safe to say, we can continue to expect a certain amount of volatility as the market continue to adjust.
Moving forward, we think the best way to navigate this landscape is to make sure you work with a real estate agent this is looking out for your best interest and not theirs. He or she should be able to help you understand what’s happening, while providing you with the guidance you need to make the most informed home buying decisions possible. If the agent you are working with is not able to do so, you are not in good hands and should find yourself an agent that will look out for your best interest. As always, we thank you for stopping by. See you at the closing table.
