With so much noise on the airwaves, it is difficult for a potential Borrower (and/or a Professional who assists potential Borrowers) to know what is really going on with Mortgage Rates. Let's face it, Mortgage Companies have a vested "interest" in motivating Borrowers to act now before Mortgage Rates increase.
Below are 3 different charts, courtesy of The Mortgage Coach community (a trusted name for Relationship-Based Mortgage Loan Officers). For lack of a better term, these charts are a "playbook" that the majority of Banks use when altering the specific Mortgage Rates (and fees/credits associated with each interest rate) on any given business day.
In order to understand how to read the first chart, please read the following:
- Each red or green image is called a "candlestick"
- Each candlestick summarizes the market movement for 1 business day (the most recent day is located at the right end of the chart)
- The candlestick movements are the closest indicator to determine the movement of the "costs or credits associated with each interest rate" available on any given business day
- A "Green" candlestick means the market IMPROVED overall for that business day
- A "Red" candlestick means the market WORSENED overall for that business day
- The "Higher on the Chart" the candlestick appears, the BETTER it is for the Borrower
- The "Lower on the Chart" the candlestick appears, the WORSE it is for the Borrower
Below is a summary for the most recent 1 month (as published on the morning of 1/28/2019)
As you can see above, nearly 1 month ago we had a "Big Green" day high atop the chart (which was favorable for the Borrower). Since then, we have had a steady trend downwards (worse for the Borrower) overall.
The next chart shows a 3 month view. By showing this larger sample period, we lose the colors of the candlesticks, and instead need to focus on the trajectory of each candlestick (i.e. how high/low they appear on the charts) to determine trends.
As you can see above, the green highlighted area outlines a period of overall IMPROVEMENT to Mortgage Rates (specifically the costs or credits associated with each interest rate). Since that period, we have seen a slight deterioration in Mortgage Rates.
Lastly, you will see a 2 Year period shown below. While this image looks more like a heart monitor or seismograph, you can determine the overall trajectories of Mortgage Rates over a full 2 year period.
Once again, I have used highlights (green = good, red = bad) to show trends which have occurred over the last 2 years. As you can see by a simple glance, the market is random, constantly fluctuating, and nearly impossible to predict.
My advice to anyone reading this article is simple: try not to "time the market" when pursuing a mortgage. As any Financial Planner would recite..."past performance is no indicator of future predictions." Also, as the legal community in the Mortgage Industry would like me to spotlight...nothing contained in this article is a specific Mortgage Rate quote, nor is it an offer to lend. This article is merely a factual representation of how the market moves, and specifically, how it has moved in the most recent 1 month, 3 month, and 2 year periods.
If you would ever like an updated version of these charts and/or to obtain a Mortgage Rate quote for yourself and/or someone you care about, please feel free to reach out to me. In closing, I fully believe we make better decisions in life when armed with facts, as opposed to making careless assumptions by falling prey to clever advertisement campaigns. Let's face it, when it comes to acquiring a Mortgage, there is much more room for error when choosing a professional. Choose wisely!