Will Interest Rates Go Higher? 10-18-22

By
Real Estate Agent with https://teamcoker.robertpaul.com 9023635

Will Interest Rates Go Higher?

Will Interest Rates Go Higher is one of the most pressing questions in real estate circles. Everyone from buyers and sellers to banks and brokers are looking for detailed info to provide the answer. In a presentation to our company, National Association of Realtors Chief Economist, Lawrence Yun provided a series of graphs and explanations to provide some real estate data and info.

Mr. Yun provided 19 different graphs in as part of his presentation. The first of those is below. He began with an explanation of how mortgage rate resistance points are markers of the direction and stability of interest rates. And, how understanding where the resistance points are, can help see where interest rates may move or stabilize.

In this graph of interest rates, you can see "plateaus" which is where the resistance point ranges are.  These help forecasters recognize the limits and ranges of an interest rate move.  Webster defines resistance point as

a point at which a trend meets with opposing or nullifying forces; especially the point(s) in a market that stabilizes or reverses a trend.

In the example below, the horizontal red lines indicate the resistance points. Those red horizontal lines are the "resistance points" for downward rate movement since 1990. It has been shown that rates don't move through a resistance point because of a number of factors that create resistance to further rate movement - for a time.

However, once the interest rate moves through an "established" resistance point, rates will generally keep moving until it the next one is encountered.  At that encounter, it is hoped that there is sufficient stability and economic influence to stall and stabilize further change.  

Currently, rates have moved up through the lowest resistance point. Mr. Yun said rates "blew through the first resistance point". Rates are still volatile however, and if the economy is influenced as expected, Mr. Yun sees the possibility that rates could blow through the next resistance point, too - although he'd prefer them to level off for awhile.

Mortgage Rate Resistance Points fro 1990 to 2022

November economic influencers will be the elections, the FED interpretation of the US economy, and the FED decision about how to positively influence the US economy.  The short answer to the question "Will Interest Rates Go Higher?" is that the data will not show up instantly. It will take some attention to detail over time. As in the graphed example, the resistance points are groups of months and not a specific day.

So start gathering you data set and start plotting. When you see a leveling off, rates may have reached a new resistance point. My understanding is that resistance points are based on the past data and cannot actually be forecast.

Will Interest Rates Go Higher? It depends on the strength of the economic factors surrounding the resistance points when new interest rates encounter each resistance point.

Best wishes, Heath

 

The next slide in Lawrence Yun's presentation was a comparison of "10 Treasury Yields and 30-Year Mortgage Rates".

 

Posted by

Heath Coker, Associate Broker
Berkshire Hathaway Homeservices Robert Paul Properties
teamcoker.robertpaul.com
508-548-8888  Licensed in MA
Its a beautiful day on Cape Cod!

James Heath Coker | Create Your Badge

Comments (6)

Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Thank you, I enjoyed your blog.  Again, thanks for sharing. Have a great Wednesday and sell a house. bill

Oct 19, 2022 06:39 AM
Associate Broker Falmouth MA Cape Cod Heath Coker

Thank you for the comment, Bill. Our Wednesday was great and our Thursday has received an offer from our work yesterday. Thank you for the encouragement.

Oct 20, 2022 06:13 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello and thank you for sharing this great information with us here in the Rain.  Make it a great day!

 

Oct 19, 2022 09:02 AM
Associate Broker Falmouth MA Cape Cod Heath Coker

Thank you for the comment, Will. You have a good slogan. I'd be tempted to change it to,   where there's this Will , there's a way. It will be an interesting rest of the year.

Oct 20, 2022 06:11 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Associate Broker Falmouth MA Cape Cod Heath Coker I have been a Loan Originator for over 18 years, and one thing I have learned that time is that no one can predict what interest rates will do.  Having said that, in my opinion, interest rates are not done going up in the short term.

Oct 19, 2022 11:41 AM
Associate Broker Falmouth MA Cape Cod Heath Coker
https://teamcoker.robertpaul.com - Falmouth, MA
Heath Coker Berkshire Hathaway HS Robert Paul Prop

Thank you for the comment, George. Your experience is useful and I think there a lot of experienced real estate professionals who'd agree with you. I remember the 80s when rates went up by the hour some months. It was crazy.

Oct 20, 2022 06:09 AM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Thank you for your post and the graph is self-evident.  However, I still remember buying my first house at 9-3/4% with an ADJ rate that went up to 17%. It's all relative.  Since 1990 the rates have been better than I had experienced, and so my mind wraps around this differently than the average person who is under 40.

Oct 28, 2022 01:26 PM
Associate Broker Falmouth MA Cape Cod Heath Coker
https://teamcoker.robertpaul.com - Falmouth, MA
Heath Coker Berkshire Hathaway HS Robert Paul Prop

Thank you for the comment Diana Dahlberg Kenosha, WI. 

I was working the computers for a stock brokerage in the 1980s when rates were over 20%. Ans when we bought our fist house the rate was 9%. It looks like we're headed to the 9% range again.

Oct 29, 2022 05:36 AM