Are Mortgage Rates Going up soon???

Question

For you lenders out there.  I had a friend tell me that there lender called them today  to lock in rates on a primary because rates are getting ready to sky rocket.  I don’t see that happening.  What am I missing??? Please help me understand.

Bill Goodland · Answer

Their lender only gets paid when a deal closes. Therefore, they will tell you anything that will make you more likely to do business with them including exaggerate the liklihood that rates will rise so that you're more likely to do business with them as soon as possible.

Chris Mason · Answer

Good question, and common misconception.

The Fed sets the federal funds rate, which is overnight interbank debt.

30 year fixed Mortgages are long term consumer debt. Little to no correlation between that and the Fed rate.

I've seen cases where the fed raised rates, and mortgage rates went down. I've seen cases wherein the fed lowered rates, and mortgage rates went up. Rates were starting to creep up right after the fed lowered them this most recent time, then Trump tweeted something and Wall Street spazzed, causing rates to drop.... but until he Tweeted about China, mortgage rates were starting to rise 1 day following the fed rate drop.

Immanuel Sibero · Answer

Hmmm... I thought interest rates are set and tweeted periodically by the federal government, no?

Miles McClure · Answer

Rates are generally tied to a treasury, prime or libor + margin = rate. Currently rates have gone down due to a move toward safety in the bond market from fear by investors and the fed lowering the rate it pays banks. The more people buy a bond the price goes up and the rate(yield) goes down. Think of it like a cap rate on a property. Rates could continue to go lower but the future is unknown. If you look historically rates are very cheap today. Yields are down durastically on the 10 year from 8 months ago so it is a great time to lock in given the historical data.

Jerry Padilla · Answer

@Delmas Gibson

No one knows where rates are going to go. There is no way to predict!

Rates are great right now, though!

Delmas Gibson · Answer

Thanks everyone that replied.  I feel the same as most of you. Thanks so much just wanted to make sure I didn’t miss anything. @Theresa Harris I agree 100 percent

Theresa Harris · Answer

Rates aren't going to stay this low forever.  I renewed one of my mortgages this summer and was told the rates tend to go down in the summer when more people are buying and they go up again in the fall-as a minor trend.  Over time rates will go up, the question is how quickly.  Banks aren't going to raise them too quickly as too many people would default.

Russell Brazil · Answer

Rates have dropped significantly in a short period of time. Its a very good idea to lock a rate currently.

Tim Johnson · Answer

Rates change daily and sometimes multiple times a day, I think rates are going to stay low for some time so I wouldn't rush out and do something crazy.  Nothing wrong with locking a rate, it needs to be done if your in the process, sometimes a client needs a push.

Are Mortgage Rates Going up soon???

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