If you’re thinking about buying or selling a home in the Seattle area, you’ll want to keep a pulse on what’s happening with mortgage rates. Rates have been climbing in recent months, especially since January 2022 of this year. And just a few weeks ago, the 30-year fixed mortgage rate from Freddie Mac approached 4% for the first time since May of 2019. That blew my mind because I didn’t think it would get there til the end of the year, but BOOM, it happened faster than anybody thought.
HOWEVER – good news here for home buyers and sellers – we’ve gotten a little reprieve as rates have dropped a bit due to the Russia/Ukraine conflict. Experts say it’s to be expected.
Here’s a look at how industry leaders are explaining the impact global uncertainty has on mortgage rates:
Odeta Kushi, Deputy Chief Economist at First American, says: One unintended side effect of global uncertainty is that it often results in downward pressure on mortgage rates.” He also 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.”
What does that mean? Well, essentially, economic uncertainty can impact the 10-year treasury yield – which has a long-standing relationship with mortgage rates and is often considered a leading indicator of where rates are headed. Basically, events overseas can have an impact on mortgage rates here, and that’s what we’re seeing today.
The next question you should be asking is, “Will Mortgage Rates Stay Down?”
While no one has a crystal ball to predict exactly what will happen with rates in the future, experts agree this slight decline is temporary. Sam Khater, Chief Economist at Freddie Mac, echoes Kushi’s sentiment, but adds that the decline in rates won’t last:
“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.”
So, if you’re in the market to buy a home, doing so BEFORE rates start to rise again maybe your most affordable option. If you’re in the market to sell, you may have more buyer interest before higher interest rates put downward pressure on buyer demand.
The bottom line is:
Mortgage rates are an important piece of the puzzle when it comes to buying and selling a home because they help determine how much buyers will pay for their monthly mortgage payments. I don’t know when you’ll be viewing this, so Let’s connect so we can get you up-to-date information on rates and trusted advice on how to time your next move.