Markets & EconomyMortgage

7 rules of falling mortgage rates

'The downtrend is in the past' and other words of wisdom to remember
  • The downtrend is in the past, and the stronger and deeper it has been, the less likely to continue.
  • Beware expecting or even hoping that any rate decline will continue.
  • The principal reason for this year’s decline in rates -- and the long wave pushing down for decades -- is the combination of a rapidly aging world and too much debt, never seen before.

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Any downtrend in rates brings temptations and pressures to both professionals and civilians. Hence, a series of rules cribbed from prior declines and adjusted to this one. [graphiq id="5vkQjNOAFN3" title="30-Year Fixed Rate Mortgage Rates for the Past 6 Months" width="600" height="400" url="https://w.graphiq.com/w/5vkQjNOAFN3" link="http://mortgage-lenders.credio.com" link_text="30-Year Fixed Rate Mortgage Rates for the Past 6 Months | Credio" ] The rules: 1. The most powerful is the most obvious, and hence the most overlooked: The downtrend is in the past, and the stronger and deeper it has been, the less likely to continue. Rates have fallen from 4.25 percent to almost 3.50 percent in six months, when at the outset all thought they would rise, and during a shift from Fed easing super-cycle to tightening. 2. Heard at trading desks everywhere, and usually with exasperated impatience: “Oh yeah? What are you going to do if you’re wrong?” Beware expecting or even ho...