They Said It Better Than Me

They Said It Better Than Me

 

 

     I try to keep folks in the loop all the time about what's happening in the mortgage marketplace, specifically when it comes to the question on everyone's mind - "where are rates headed?".

 

     It's a tough question to tackle, because most of the media outlets that offer their opinions are nothing more than short-sighted, closed-minded guesstimates.  While they may offer some relevant data, they tend to ignore other, equally important information, so it's tough to figure out "who to believe".

 

 

     My thoughts on where the markets are headed has been a consistent "nobody knows", and while this seems like an easy cop-out that allows me to be neither right nor wrong, it's actually a bold statement - the Fed, that financial body that holds almost the entire global economy in their hands?  I don't think they have a clue what's going to happen.  Hedge fund managers handling billions of dollars in investments?  I'm not sure they know what they're doing right now, either.  That's pretty bold coming from little ole me, but there are so many moving parts to the global economy, that regardless of what one entity does, they cannot predict how other countries, national banks, and governments will react.  Today, when visiting the Mortgage News Daily website (yes...I am an industry nerd), I read the following paragraph that encapsules exactly my opinion, but they say it far more eloquently than I have, so I thought it important to share:

 

 

"It's a highly uncertain time for global financial markets.  On the one hand, some believe we're in the midst of a race among world central banks to devalue currencies and lower interest rates.  Others believe that the global economy is turning a corner and rates will grind higher.  That had been creating a lot of volatility, which made for uncertain fluctuations from day to day.  But those periods of volatility have been interspersed by utter indecision where rates are effectively drifting sideways with no conviction and no desire to get off the fence.  We have yet to see a truly big/scary move higher after 2015's first (and so far "only") big push toward higher rates that ended at the beginning of March.  We've been sideways right in between the highs and lows ever since."

- from Mortgage News Daily

 

 

     I think this is important because that above quote is something that should be shouted from the rooftops, to anyone and everyone that would like to buy a home over the next year or 2 (or has one to sell).  There's no room to sit on the fence.  When we say "rates could be higher tomorrow" we are not scaring you into a lock - we're telling you the only reality in today's marketplace is uncertainty.  My personal opinion is WHO CARES if you can get a lower rate.  3.75% VS the potential for a 3.25%?  Who cares? Either way you're catching mortgage debt at a historic low.  What people should care about is the difference between 3.75% and 5.5%.  When rates go up, they go up quickly, and if that trend takes hold, people will be kicking themselves for not locking in a 3.something.  Short term, I think there's room for rates to move lower, but if your rate starts with a 3, there's really no room for complaint or hesitation.  Get your loan done, and be happy that you could get it while it lasted.

John Meussner

NMLS# 138061

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