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Misleading News About Mortgage Rates?

October 14th, 2016 · No Comments · Hope Ranch Real Estate, Montecito Real Estate, Santa Barbara Real Estate

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Warning! Get ready for a wave of misleading news about mortgage rates! We are bombarded by info about mortgage rates. You can’t even listen to the radio for long these days without hearing an ad imploring you to “refinance now, as rates have turned lower.”Here’s the problem: Much of the general rate information reported to consumers is just too old and generic to be helpful to actual living, breathing people, spiffy commercials notwithstanding. Consumer media outlets report on mortgage rates as if they move glacially and are the same everywhere, for everybody. This, simply put, is wrong. Mortgage Rates  are constantly changing and vary by location, by loan product and terms, and by borrower.

Most people are left with the impression that mortgage rates are less dynamic than they are. That’s because the rates are complex to follow, so most reports about them have to be overly simplified to focus on averages for the most popular loan products.Most consumer-targeted mortgage rate stories are based on the weekly reports issued by Freddie Mac on the averages they collect by surveying lenders. These reports come out every Thursday.

Even if you accept these simple averages as representative of the overall trend—when rates are on the move—the weekly averages are slow to represent the true current levels.Over the past 15 weeks, we’ve had seven down weeks and eight up weeks in rates. That’s why they seem unchanged.And last week saw the single biggest amount of weekly change during that time period—upward movement. The current upward movement in rates is a reflection of financial markets globally expecting less quantitative easing from the European Central Bank and another hike by the Federal Reserve this December.

It is tough to predict exactly where rates will be in any given day, week, or month, but the general consensus from here is that we are likely to see a gradual movement upward.That means if you are in the midst of a purchase or refinance, it might be a good time to lock. And if you are thinking of purchasing or refinancing in the near term, you might want to act while rates are still very close to the lows for the year. Another few weeks like this one, and we’ll find ourselves waxing nostalgic about just how low rates were in the summer of 2016. (Article from Realtor.com by Jonathan Smoke/ Image by Roy Scott-Getty Image)

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