Can Global Uncertainties Impact Mortgage Rates?

If you’re thinking about buying or selling a home, you’ll want to keep a pulse on what’s happening with mortgage rates. Rates have been climbing in recent months, especially since January of this year. And just a few weeks ago, the 30-year fixed mortgage rate from Freddie Mac approached 4% for the first time since May of 2019. But that climb has dropped slightly over the past few weeks (see graph below):

The recent decline in mortgage rates is primarily due to growing uncertainty around geopolitical tensions surrounding Russia and Ukraine. But experts say it’s to be expected.

Here’s a look at how industry leaders are explaining the impact global uncertainty has on mortgage rates:

Odeta Kushi, Deputy Chief Economist at First American, says:

While mortgage rates trended upward in 2022, one unintended side effect of global uncertainty is that it often results in downward pressure on mortgage rates.”

In another interview, Kushi adds:

“Geopolitical events play an important role in impacting the long end of the yield curve and mortgage rates. For example, in the weeks following the ‘Brexit’ vote in 2016, the U.S. Treasury bond yield declined and led to a corresponding decline in mortgage rates.”

Kushi’s insights are a reminder that, historically, economic uncertainty can impact the 10-year treasury yield – which has a long-standing relationship with mortgage rates and is often considered a leading indicator of where rates are headed. Basically, events overseas can have an impact on mortgage rates here, and that’s what we’re seeing today.

Will Mortgage Rates Stay Down?

While no one has a crystal ball to predict exactly what will happen with rates in the future, experts agree this slight decline is temporary. Sam Khater, Chief Economist at Freddie Mac, echoes Kushi’s sentiment, but adds that the decline in rates won’t last:

“Geopolitical tensions caused U.S. Treasury yields to recede this week . . . leading to a drop in mortgage rates. While inflationary pressures remain, the cascading impacts of the war in Ukraine have created market uncertainty. Consequently, rates are expected to stay low in the short-term but will likely increase in the coming months.” 

Rates will likely fluctuate in the short-term based on what’s happening globally. But before long, experts project rates will renew their climb. If you’re in the market to buy a home, doing so before rates start to rise again maybe your most affordable option.

Bottom Line

Mortgage rates are an important piece of the puzzle because they help determine how much you’ll owe on your monthly mortgage payment in your next home. Let’s connect so you have up-to-date information on rates and trusted advice on how to time your next move.

 

Let Us Help You!

Are you looking to buy or sell a home in Knoxville, Tennessee? Please don’t hesitate to reach out to Ryan Coleman and our team at Hometown Realty as a trusted source for up-to-date real estate information in the East Tennessee area!

865-693-SOLD

Hometown Realty Orange and Black Logo

Hometown Realty Logo

 

Real Estate With Ryan

👉 In this week’s episode, Ryan talks about the process of getting your house back on the market after a potential sale falls through! 👈

🎙 Join Ryan Coleman Broker/Owner of Hometown Realty and host of REWR every Saturday @ 11am on Talk Radio 92.3 / AM 760 WETR and at 1pm on News Talk 98.7 🎙⁠

Be sure to download the Talk Radio and News Talk apps to listen on the go!
Talk Radio: https://apple.co/37q7lAu
News Talk: https://apple.co/3aHkXth

You can watch past live streams on other Social Media channels:⁠
YouTube: https://bit.ly/3gkhS3U
Facebook: https://bit.ly/3l67kJd
Soundcloud: https://bit.ly/32bvkC9
Apple Podcast: https://apple.co/3j7aomn
Google Podcast: https://bit.ly/3gcSXiE

Did you know we give away tickets for all of the home Tennessee Volunteer games? If you are interested in entering click the link below! Completely free, we want to give back to our awesome clients & potential clients!

https://ryancoleman.org/vol-ticket-giveaway/

Fans painted in orange & white with "VOLS" spelled out on their chest, yelling and cheering on the University of Tennessee Vols Football Team

Volunteer fans cheering on the Tennessee Football Team!

Check out this article next

With Mortgage Rates Climbing, Now is the Time to Act

With Mortgage Rates Climbing, Now is the Time to Act

If youre thinking about buying a home, this news may have come as a bit of a shock. But the truth is, it wasnt entirely…

Read Article
About the Author
Ryan Coleman
Ryan is from Richmond Virginia and attended college here in Knoxville Tennessee. He is married to his beautiful wife April, they have one daughter and one son who reside in Knoxville. Ryan is a highly trained, knowledgeable Real Estate Broker and Investor (owning both Residential Investment & Commercial Real Estate). For over 20 years, Ryan has spent much of his time helping buyers and sellers find their perfect dream home, devoting his personal attention during the entire transaction until and beyond closing.