Today's Mortgage Rates

 

Yes, your credit and income affect your mortgage rate, but there’s much more to it than that. Mortgage rates constantly fluctuate based on various factors in the market. Even if your financial status is stable, you may see very different mortgage rates throughout the year.

Factors that Influence Mortgage Rates 

The Housing Market
Changes in the housing market can really impact mortgage rates. Supply and demand influence the cost of a mortgage just like it does the cost of the house itself. When there’s more competition for homes, and thus more competition for mortgages, lenders can take advantage of this to increase rates. However, when competition wanes, and there are more homes than buyers, lenders may try to attract customers and compete with other lenders by lowering their rates.

The Bond Market
Because mortgage lenders compete with bond sales, the interest rates for bonds can influence the mortgage rates. If interest rates on bonds go up, mortgage rates may increase to match. Since lenders can do that without losing their competitive edge. Likewise, when bond rates go down, mortgage rates often do too. To compete and attract buyers.

You can often determine the state of bond interest by looking at resale prices in the secondary bond market. However, contrary to what you might expect, mortgage rates go up when bond prices go down, and vice versa.

The State of the Economy
The current economy significantly impacts how saturated the home buying and selling markets are, so it’s logical that this would also impact mortgage rates. When the economy is strong, and many people are employed, they’re more likely to be looking to upgrade their homes. This increased demand raises mortgage rates proportionally. Likewise, a weak economy with high unemployment means fewer people can afford new homes, and mortgage rates decrease to match the level of competition.

The Federal Reserve’s Monetary Policy
The  Federal Reserve’s Monetary Policy aims to regulate the economy and encourage economic stability and prosperity. This may include policies that regulate mortgage rates or influence other factors that will impact the mortgage rates as a byproduct, whether intentional or unintentional.

 

Get the National Average Mortgage Rate from Mortgage News Daily -
National Average Mortgage Rates

 

What’s Next
When you’re looking for a home, you want a real estate agent who can help you with every aspect of the home-buying process, including securing an affordable mortgage.

Pam and Dave Jones at Extraordinary Transitions have over three decades of real estate experience to help make your home-buying journey as smooth as possible. Contact us to see how we can get you into the home of your dreams.