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Why are Interest Rates So Hard to Predict?
- wendymonday
- 3 minutes ago
- 1 min read
Everyone in my industry is waiting for mortgage rates to drop and spark homebuyer activity.
Guessing when that will happen is a frustrating game.
It would be simpler if mortgage rates were tied to factor.  But economic surprises pop up that make forecasting difficult.
A prime example occurred JUST LAST YEAR, when The Fed cut short-term interest rates and mortgage rates went up.
Let’s take a look at last year’s timeline.
    •    Fed cut on Sept 18, 2024. Rates were around 6.09%.
    •    The next week mortgage rates starting moving up.
    •    By late November 2024, the average 30-year fixed mortgage rate had climbed to 6.84%.
So what does this mean going forward?
Experts predict mortgage rates to eventually drop under 6%. But that process could be bumpy, and it could take longer than many potential buyers would want.
If you wait that long, you might be facing a rent increase or higher home prices.
I always tell buyers and sellers, you can’t really time the market.
But you can time your own life. 🤩
The good news for buyers is that the market no longer favors sellers to the extent that it did during the pandemic frenzy.
For buyers who have been waiting on the sidelines, the housing market is finally starting to listen.
