As we visit yet another Friday for mortgage news, events, and articles, we are coming back to an all to familiar topic, and that is the consistent rising mortgage rates we have experienced since the Presidential Election took place. However, in this article we are going to examine if Mortgage Rates Are Primed To Fall and how or why this would happen. The original assumption around the election was that if the Republican candidate were to win that the economy, stock market, and subsequent mortgage rates would fall to even lower levels than they were currently. However, as the results came through, quite the obvious was observed and mortgage rates have been steadily climbing for about a month now. According to recent studies on this week’s mortgage rates, it was determined that rates increased another 0.05% to bring the 30-year fixed rate national average to 4.13% or the highest rate seen in over 2 years! In contrast, just a few months ago in the late-summer and early fall, historic lows were recorded when rates dipped to nearly 3.25% on a 30-year fixed rate mortgage. This has already begun to take its toll on the market as mortgage loan applications for purchases and refinances have decreased by 10%+ in the last 2 weeks as people are waiting and hoping for the market to stabilize and maybe it will hold true that Mortgage Rates Are Primed To Fall.
The big pinch that is felt across the industry is by potential home buyers as they have seen their affordability slashed in the last 45 days and would now have to spend roughly 10-15% less than they would have in the fall. So if anyone is looking if Mortgage Rates Are Primed To Fall it is this group of individuals. As always when Fannie Mae and Freddie Mac loans increase, you can always count on your FHA products and even your VA products to have lower interest rates and mortgage rates that cost less to maintain. What I mean by this is if you are not a top-tier borrower (20%+ down and 740 FICO) then there is really not a reason right now to go with a conventional loan. You are much better going with an FHA Loan with 3.5% down and you can keep all that extra money in your savings, investments, or retirement.
When looking if Mortgage Rates Are Primed To Fall it almost always seems to happen when there is an unsustainable trend in place and what we are seeing right now is hopefully that. As rates have increased more than 15% in 5 weeks, there really isn’t justification for this to keep going, especially when other market factors such as applications and sales have decreased in the last few weeks. This would suggest that the market cannot handle and sustain these quickly rising interest rates. Another way to justify Mortgage Rates Are Primed To Fall is to look that not much negative financial or economic data has come out over the past month or so. Since rates have shot up so much, the slightest bit of bad news can send the rates crashing back down to around where they were pre-election. This is just a guess, but when you look at the trends, after a sharp increase, there is almost always a correction that occurs, and we can be poised to see that in the coming month or two.
If you want to prepare under the assumption that Mortgage Rates Are Primed To Fall then you need to reach out to me ASAP at 888-900-1020 and we can go over your options and your place in the home buying process. You can also email me at firstname.lastname@example.org or you can apply today at www.loanconsultants.org. I am available day or night, weekends, and holidays. Call, text, or email me and I will be in touch with you immediately.