NEWS: Have You Noticed the Way Global Uncertainty Is Impacting Mortgage Rates?

If you’re thinking about buying or selling a home this year, you’ll want to keep an eye on what’s happening with mortgage rates. Rates have been soaring over the past few months, especially since January of this year. Just a few weeks ago, the 30-year fixed mortgage rate from Freddie Mac reached approximately 4% for the first time since May of 2019. 

The recent drop in mortgage rates is mainly due to growing tensions and conflict overseas in Russia and Ukraine but experts say that it is to be expected.

Here’s how industry leaders are describing the impact global uncertainty has on current mortgage rates:

Odeta Kushi, Deputy Chief Economist at First American, says: “While mortgage rates trended upward in 2022, one unintended side effect of global uncertainty is that it often results in downward pressure on mortgage rates.”

In another interview, Kushi adds: “Geopolitical events play an important role in impacting the long end of the yield curve and mortgage rates. For example, in the weeks following the ‘Brexit’ vote in 2016, the U.S. Treasury bond yield declined and led to a corresponding decline in mortgage rates.”

So the million-dollar question is, will mortgage rates stay down? (Let us all make a wish the next time we see 11:11 on the clock)

While we don't have a crystal ball here at TourDay to predict EXACTLY what will happen with rates in the future, experts agree this slight drop is probably temporary. (Where's Snoop Dog to sing Drop it Like It's Hot right now?)

Sam Khater, Chief Economist at Freddie Mac adds:

“Geopolitical tensions caused U.S. Treasury yields to recede this week . . . leading to a drop in mortgage rates. While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty. Consequently, rates are expected to stay low in the short-term but will likely increase in the coming months.” 

Rates will likely fluctuate in the short-term based on what’s happening globally (thanks Putin...eye roll). But before long, experts' project rates will renew their upward climb (cue The Climb by Miley Cyrus). If you’re in the market to buy a home, doing so before rates start to rise again may be your most affordable option. Get out there and make those money moves!!

Bottom Line
Mortgage rates are an important factor because they help determine how much you’ll owe on your monthly mortgage payment in your next home.

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