Rates fell for the first time in two months. Demand fell too. Both things happened at once, like a fire sale at a store nobody can enter.
Picture the scene. A bank slashes the price of a thing you can't afford. By a fraction of a percentage point. You look at the new number. You look at your savings account. You close the laptop and eat cereal for dinner.
The mortgage industry calls this "a modest improvement in borrowing conditions." Fake press release tone, but accurate. Modest. Improvement. Conditions. Three words doing the work of a hostage negotiator.
Here is the part the headline buries. Rates dropped, and applications still fell further. That means the problem was never a quarter point. The problem is the house costs more than your entire personal net worth, your parents' net worth, and the net worth of the guy at the open house eating the free cookies.
That guy, by the way, is the only winner in this market. The cookies are still priced where they were in 2019.
Retail traders will see "rates drop" and buy homebuilder stocks. They will draw a trendline on a chart of a mortgage rate. They will call it a double bottom. It is a rate, not a stock. It does not have a bottom. It has a bank, and the bank has your dad's signature on something.
The chart doesn't care about your feelings or your down payment. Neither does a lender. At least the chart is free.
Borrowers are "having trouble getting into the housing market." Correct. So is everyone. The housing market is a nightclub with a bouncer named Interest Rate, and tonight he moved the velvet rope two inches and called it inclusion.
Keep refreshing the rate tracker. Maybe next week it drops another hair. You'll finally qualify for the house you can't afford, in the neighborhood you can't stand, with the roof you can't replace.
Congratulations in advance on your starter home, which is a lease with extra steps and a lifetime of regret.
Photo by Precondo CA on Unsplash
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