You may have noticed during 2016—whether it comes to weather, sports, politics….anything, really—that the way you frame the news makes a huge difference in how others interpret it. The good news for you is that The Stephens-Brotsky Group doesn’t make money by creating click-bait headlines, so we’ll advise you in advance not to be worried when we say Wednesday saw national mortgage rates rise from their lowest point to their highest point in one 24-hour period.
That’s the sort of thing that might drive an everyday reader nuts with worry, but someone familiar with the mortgage industry can put two-and-two together to figure out that it doesn’t mean anything. This is isn’t a Bailey Brothers Building and Loan situation—We’re only three weeks into the year, and those three weeks haven’t been the most exciting of times.
The short story is that the average lender is still offering 30-year fixed rate loans at 4.25 percent, and you can find 4.125 percent if you’re lucky.
So the headline “mortgage rates jump from lowest-to-highest in one day” isn’t untrue, but at the same time, there aren’t any dramatic causes for it because the overall range of rates available during 2017 has been slim.
Headlines can be twisted to reflect news positively as well (even though that doesn’t attract as many readers). In this case, we could also note that “Current Mortgage Rates Remain Far Lower Than December Numbers.” And they have, by an eighth of a percentage in most cases. Things have calmed down following the announcement of a Federal Interest Rate rise last month, and consistency is about the most we can ask for right now.
The bad news is that the policies of the Trump administration conform with trends toward higher rates (but, to be fair, so do the current policies of the Federal Board). No one can really guarantee what these policies will do to rates in the long term, but it’s safe to say that they won’t be returning to mid-2016 levels anytime soon.
If rates were to fall, it will take at least a few months of the new presidency for it to happen, just so the market can get a feel for where things are headed. And, again, even then things are unlikely to reverse; The Fed is planning on raising rates at least twice more during 2017. There are other events that could drive down mortgage rates. Like a huge economic downturn that hurts growth, employment and wages—thus forcing The Fed’s hand.
So no. You don’t want 3.5 percent rates that badly. Things are okay right now.
“As always, if you’re losing sleep over rate markets and spending more time watching bond movement than playing with your kids/dog, probably best to lock and relax,” said Ted Rood, senior originator at MB Financial Bank.