If you’re considering buying a home or selling in Metro Detroit, you may want to check out the Mortgage Rate Trends and find out what’s next!
Then, Now, and What’s Next
Are you thinking about buying or selling a home soon in Metro Detroit? Keep an eye on mortgage rate trends. These rates shape how much you’ll pay monthly on your home loan. Right now, affordability is a hot topic. So let’s break it down. We’ll look at where rates have been, where they stand today, and what might happen next. Don’t forget that mortgage rates and inflation often move together. Knowing this connection can give you a heads-up on what to expect in the near future. I recommend keeping updated with our Mortgage Rate Trends if you are thinking about buying a home in Metro Detroit.
Providing Insight on Mortgage Rates Sticker Shock⚡
Since April 1971, Freddie Mac has consistently monitored the 30-year fixed mortgage rate trends. Their commitment to transparency shines through in their weekly Primary Mortgage Market Survey. This survey compiles mortgage application data from lenders nationwide (check out the graph below). It’s a valuable tool for potential home sellers and buyers, offering a glimpse into the ever-changing real estate landscape. I update Freddie Mac PMMS every Thursday afternoon. Check out Navigating Mortgage Rates: Empower Your Move.
On the right side of the graph, you’ll notice a significant increase in mortgage rates since the beginning of last year. However, it’s crucial to remember that even with this rise, today’s rates are still below the 52-year average. This historical perspective is valuable as it provides context for the current situation.
Now, here’s where it gets interesting. Over the past 15 years, buyers have become accustomed to mortgage rates fluctuating between 3% and 5%. This range has been relatively stable during this period for Metro Detroit.
Why is this important?
It helps us understand why the recent rate increase might feel like a shock, even though they are close to their long-term average. Many buyers have adapted to these elevated rates over the past year, but a slightly lower rate would be a welcome sight for future home buyers.
We must look closely at inflation to determine if a lower rate is realistic. Inflation plays a significant role in shaping mortgage rates, and understanding this connection can benefit buyers and sellers.
So, stay tuned as we delve deeper into the factors influencing mortgage rates and how they relate to the current housing market in Metro Detroit. Whether you’re a prospective home buyer or seller, understanding these dynamics is key to making informed decisions in today’s real estate market in Metro Detroit.
What’s Next ❓For Mortgage Rates
The Federal Reserve has been working hard to lower inflation since early 2022. That’s significant because, historically, there’s been a connection between inflation and mortgage rates (see graph below):
This graph shows a pretty reliable relationship
This chart clearly illustrates how inflation and mortgage rates tend to move in sync. When you see an inflation spike (indicated in blue), you’ll often find mortgage rates (marked in green) catching up shortly after. The latest inflation uptick has been circled for your attention, and yes, mortgage rates are tailing closely.
Although nothing in finance is 100% predictable, the recent dip in inflation suggests that mortgage rates may soon follow suit, aligning with historical patterns. So whether you’re thinking of buying or selling a home, this could be an excellent time to keep an eye on the market!
What My Crystal Ball is Telling Me
After the jobs report came out with low unemployment, an increase in wages, inflation is still at 3.8%, housing prices are still up, and now the spike in the 10-year Treasury Yield, I don’t think mortgage rates are on the way down. I think they’re still on the rise up 🤯🤦♀️The leading economists are predicting the 10-year Yield bond yields are likely heading to 6%. Figure in the Feds gap increase of 2.75 puts Mortgage rates in the 8.75% range. I will keep you updated, and you can follow the 10-year treasury yield heading.
What Comes Next?
I began working on this article at the beginning of the week and chose to share it a week later. Let me tell you, things have certainly shifted, but there’s still reason for optimism. I had hoped that a decrease in inflation would set in motion a decline in the 10-year Treasury Yield, with Mortgage Rates following suit. Unfortunately, the 10-year yield surged rapidly during the first week of October, causing Mortgage Rates to take a substantial leap. If you’re curious about the factors influencing Mortgage Rates, I suggest diving into my article “High Mortgage Rates Explained.” This will help you understand what’s happening in the market.
🔮 What My Crystal Ball Reveals 🔮
After the jobs report came out with low unemployment (10-6-23), an increase in wages, inflation is still at 3.8%, housing prices are still up, and now the spike in the 10-year Treasury Yield, I don’t think mortgage rates are on the way down. I think they’re still on the rise up 🤯🤦♀️The leading economists are predicting the 10-year Yield bond yield could likely head to 6%. Figure in the Feds gap increase of 2.75 puts Mortgage rates in the 8.75% range. I will keep you updated, and you can follow the 10-year Treasury Yield trends.
Mortgage Rate Snapshot Key Takeaway
Want to predict the future of mortgage rates? Follow the yield and track the historical trends. There’s a strong link between inflation and mortgage rates. Is there good news? Nope, we are on hold for lower mortgage rates. We need a significant drop in inflation. More people have jobs at a higher wage. Whether paying cash or using credit, we still buy, keeping inflation high. The markets are changing quickly, and I will keep you updated by visiting my blog post, Navigating Mortgage Rates.
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