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Market News and Trends

Re-Post: Interest Rates


Since mortgage interest rates fell in 2008 and 2009, many prospective home buyers have come to consider rates in the 3.5% to 4% range “normal.”  There were many rumors that rates were about to shoot upward again, and I certainly told many clients that “rates can’t stay this low forever.”  It turns out that mortgage rates have begun inching upward, but frequent press reports about the Federal Reserve Board raising interest rates can cause confusion among concerned mortgage borrowers who don’t understand that the Fed has no direct control in the mortgage market, and that in fact mortgage rates really don’t consistently follow the rates that the Fed does control.  With that in mind, I feel to need to recall a couple of previous posts.

Almost three years ago I wrote All the talk about interest rates …, commenting on the lack of a relationship between the Federal Funds Rate and short-term bonds, and mortgage interest rates.  Although I have not extended the relevant graph today, the post itself is still appropriate now.  If you want to forecast mortgage rates, read forecasts for the 10-year T-bill.  (And of course, be informed about real estate market health and outlook.  That’s why I have maintained and written about my market dashboard for almost 10 years.  Just search “dashboard” on this site.)

Earlier this year I posted Interest Rates Rise and expressed my belief that we would finally see rising rates this year.  Today, I still believe that will see slowly rising rates over the next couple of years.  (We will also see rates fall back along the way, and then rise a little more.)

My crystal ball gets foggy farther into the future, but I wanted to remind readers that the sky isn’t falling, and that what the Fed does has little to do with it.

About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

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