Mortgage rates climbed to their highest level in three weeks. Three weeks. The housing market now operates on the emotional stability of a teenager checking Instagram likes.
Demand for refinances dropped. Demand for purchase loans dropped. Rates went up maybe forty basis points and everyone decided home ownership was a scam. These are the same people who'll pay $8 for coffee but won't lock in a rate because they read a Bloomberg headline about the Fed maybe doing something in six months.
The technical picture here is flawless. Rates go up. Demand goes down. This is called supply and demand. You learned it in ninth grade between vaping in the bathroom and failing algebra. But now it's a news story because it happened over a three-week window and someone needed to justify their mortgage reporter salary.
Here's what actually occurred. Rates ticked up. Some guy in Nebraska who was definitely going to refinance his $240,000 mortgage to save $37 a month decided to wait. He'll check rates again in two weeks. They'll be lower. He still won't refinance. He'll wait for the perfect moment that never comes because he thinks mortgage rates are a stock he can time.
Purchase loan demand fell too. Turns out people who were totally ready to buy a house suddenly weren't ready when rates moved thirteen basis points. They had their down payment. They had their pre-approval. But rates hit a three-week high and they decided to rent for another year and complain about their landlord on Twitter.
The chart shows a clear three-week high. The chart from four weeks ago shows a clear four-week high. The chart is always showing some kind of high because that's how time works. You cannot trade this information. You can barely read this information. But you'll definitely base your largest financial decision on it.
Photo by Artful Homes on Unsplash
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