Now that June has turned to July, market watchers are once again looking forward to the Federal Reserve Meeting scheduled for July 26-27. Disucssing the potential moves one financial news anchor said “mortgage rates…they’re getting pretty high”.  That was a cause for reflection, as many home buyers and sellers are starting to believe the narrative that mortgages are going out-of-control.

While this chart is a bit confusing (you can click here to see it full size) follow the path of the orange line to track the 30-year fixed rate mortgage.  As you can see on the right edge, the line certainly has taken a “hockey stick” upturn, which is a detriment for some buyers, especially first-time buyers or those with little home equity. That’s called the “second derivitave” move, talking about how fast the rate has changed…and it certainly has changed quickly.  When you measure your buying power based on how much you can afford to pay monthly, the house of your dreams may have just come down in price a little bit.  Sellers need to understand that too – some buyers may not be there anymore.

More important for everyone to focus on is just how low, historically, the rates still are.  When you follow the path of the orange line moving to the left what you see is that rates are basically back where they have been since the start of the century…and in some cases are better.  When you exclude the COVID years, everything is basically in a similar place.

The same financial anchors who said rates are getting high have also said that the moves the Federal Reserve may or may not make in July have already been “baked in” to the rates.  So buyers can feel comfortable that rates should stay where they are (or perhaps drift even lower) in the weeks ahead.

If you would like more information on mortgage qualification and rates, contact us.


Photo: FRED, Public domain, via Wikimedia Commons