How Global Uncertainty is Impacting Mortgage Rates

If you are looking to make your way onto the market, you may want to keep in touch with current market trends. Rates have made their way up to nearly 4%, which is a rate we haven’t seen since May of 2019. With rates rising, it can be difficult to make your way through the market as a buyer. But, we have witnessed a decrease in rates in recent trends. The recent decrease in interest rates is due to tensions between Russia and Ukraine, but the experts explained this is to be expected. 

Within the past few weeks, we have witnessed a slight drop in interest rates. Climbing up to nearly 4%, these rates have decreased to 3.76% due to global uncertainty. We haven’t seen interest rates drop this much in two weeks since July 2021. 

(See the graph below provided by Freddie Mac):   


In times of crisis, there is always a flight to financial safety, and money floods into the U.S. Treasury market and mortgage-backed securities. Put simply, the more money flooding the markets ultimately means lower interest rates (for now). 

Historically, there has been a correlation between the impact of the 10-year treasury yield and mortgage rates. Economic uncertainty has played an important role in determining where interest rates are headed shortly. Events overseas can have an overall impact on what we see as a buyer or seller. Predicting what will happen in the future is nearly impossible, but we all know this slight decline in the market is only temporary. Mortgage rates will continue to fluctuate in upcoming weeks based on what we see happening overseas, but this will not last. Before we know it, rates will renew their climb. So, if you are looking to make a jump into the market, now is the time! Doing this may be your most affordable option. 

Before the invasion, we, as a country, were already facing daunting inflationary pressures, and the invasion of Ukraine has made it worse. Even so, mortgage rates are forecasted to hit 4.5% by the end of 2022, regardless of the tensions created overseas. Economists are not changing these forecasts unless this becomes a prolonged war. 

The decrease in rates will not last, and now is the time to purchase the home of your dreams! Trust us, waiting around will cost you money! Let’s get you in contact with a real estate professional to help you find the perfect home!

Post a Comment