Mortgage Rate Volatility, What’s Behind it?

Mortgage Rate Volatility, What’s Behind it?

What’s Causing Today’s Mortgage Rate Swings?

If you’ve been tracking mortgage rates, you’ve probably noticed how much they’re has been Mortgage Rate Volatility. One day they climb, and the next they drop. Why all the ups and downs? Let’s explore the key reasons behind this volatility and what it means for you.

How Elections Impact Mortgage Rates and Mortgage Rate Volatility

Political events, like elections, often shake up financial markets. This election season is no different. Markets react not only to the election results but also to expected policy changes. According to the National Association of Home Builders (NAHB):

“…the primary reason interest rates have been on the rise pertains to the uncertainty surrounding the presidential election. Although the election is now complete, there continue to be growing concerns over budget deficits.”

This uncertainty has nudged mortgage rates upward in the short term. Beyond elections, factors like international tensions, trade policies, and supply chain disruptions can push investors toward safer assets, like bonds. This, in turn, affects mortgage rates. In short, the more uncertainty, the more rates may shift.

The Role of the Federal Reserve and the Economy

Inflation and unemployment are major drivers of mortgage rates. The Federal Reserve (Fed) has been working to control inflation while keeping an eye on employment trends. When inflation eases and the job market stabilizes, the Fed often adjusts its Federal Funds Rate.

Although the Fed doesn’t directly set mortgage rates, its decisions heavily influence them. For example, after the Fed’s November 6–7 meeting, mortgage rates dipped slightly, as much of the market had already factored in the expected rate cut.

What’s Ahead for Mortgage Rates?

In the coming months, mortgage rates will likely respond to shifts in Fed policies and other economic indicators. With the transition to a new administration, additional unpredictability may arise. A report from The Mortgage Reports highlights this:

“Today’s economic indicators come with mixed pressures on mortgage rates, and we’re likely to be in for a good amount of volatility as markets adjust and respond to the election…”

To navigate these swings, it’s smart to rely on a team of professionals. Real estate experts can help you understand what’s happening and guide you through important decisions.

Bottom Line

Mortgage rates will continue to be influenced by economic changes and political developments. To stay ahead, lean on trusted real estate agents and mortgage lenders. Their expertise can help you make informed decisions, even in a shifting market.

Richard Iarossi, REALTOR®
Coldwell Banker Realty
1300 Main Chapel Way, Gambrills, MD 21054
443-995-9595 Cell
410-721-0103 Office
richard.iarossi@cbmove.com
richsellshomes.com

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