February 21, 2024

What’s Happening with Mortgage Rates?

Are you feeling a bit unsure about what’s really happening with mortgage rates? That might be because you’ve heard headlines that the rate is coming down, but then you read somewhere else that they’re up again. Understandably, it may leave you scratching your head and wondering what’s true.

a close up of a computer screen showing a graph

The simplest answer we can give: When you’re listening to economic reports about trends in mortgage rates, pay close attention to the time frame being reported on.

Mortgage Rates are Volatile

Mortgage rates don’t move in a straight line. There are too many factors at play for that to happen. Instead, rates bounce around because they’re impacted by things like economic conditions, decisions from the Federal Reserve, and so much more. That means they might be up one day and down the next depending on what’s going on in the economy and the world as a whole.

Take a look at the graph below. It uses data from Mortgage News Daily^[1] to show the ebbs and flows in the 30-year fixed mortgage rate since last October:

a graph showing the 30 year fixed mortgage rate

Looking at the graph, there are a lot of peaks and valleys. When you use data like this to explain what’s happening, the story can be different based on which two points in the graph you’re comparing.

a man in a pink sweater is thinking with his hand on his chin .

For example, if you’re only looking at the beginning of this month through now, you may think mortgage rates are on the way back up. But by looking at the latest data point compared to the peak in October, rates have been trending down. There’s no right or wrong way to look at it, as long as you have context.

The Big Picture Becomes Clear

Mortgage rates are always going to bounce around. It’s just how they work. Don’t focus too much on small daily changes. Instead, to really understand the overall trend, zoom out and look at the bigger picture.

two women are sitting at a table looking at a piece of paper .

Comparing the highest point (October) to where rates are now, they’ve definitely come down. And if you’re looking to buy a home, this is big news. Don’t be distracted by the smaller bumps along the way. The experts agree, overall, the larger downward trend could continue this year.