Which Way are Rates Headed? It Depends on Who You Ask!

We’re seeing differing opinions about which way mortgage rates are heading – as always, the opinion depends on who you are asking. Last week, one of the past Fed presidents, Bill Dudley, he said he thinks that rates are going to continue going up (like many past Fed presidents would agree).

The argument is that continuing inflation and other factors mean that they need to continue pushing rates higher. That seems to be their take.

Morgan Stanley Disagrees

Today, Morgan Stanley came out with another perspective. They said: we don’t agree with what Dudley said. It’s not surprising to hear this opinion since it’s coming from someone in the mortgage industry. I tend to agree with Morgan Stanley a bit more.

The Feds are always backward-looking. For example, Q1 GDP data came out and the market didn’t like that, but it’s 3 – 6 months ago. There have been a lot of rate hikes since then. So much of what is happening in the economy is that there are a lot of lagging effects.

Time Will Tell

Time will tell us which way rates are heading. It’s pretty well documented here in my videos (and in conversations I have with anyone regularly): it seems to me that inflation is settling down and being stickier than most people expected. But it is moving in the right direction.

The economy is definitely slowing and there are a lot of indicators to show the economic changes, which should bring rates down. But it’s proven to be a stickier and choppier ride than what we expected.

When is the Right Time to Buy a House?

Wouldn’t it be nice if we all knew the perfect time to buy a house? Wouldn’t it be great to be able to predict rates? No one knows. If you are waiting for the perfect time to buy a house – good luck!

We’ll see what happens with rates going forward. My prediction is that rates will continue coming down. But we’re in the middle of an uptrend right now – so who knows.

If you need more information about what the market looks like right now and what you would need o expect for payments and financing, I’d love to have a chat with you. Reach out any time for personalized recommendations.