Why would a Mortgage Officer give an update on the economy?
Yes, I do get this question now and again. I guess there are some that don’t realize mortgage rates are like any other financial factor in life. All financial factors are inter-related. True some are directly related like bond rates when the demand is low. Others are less directly linked.
Mortgage rates are a perfect example of the less directly linked finacial factor in life. In fact, mortgage rates can be impacted by numerous economic factors. A few key ones are unemployment, consumer spending and consumer confidence; as Americans feel better about the emplyment picture, they spend more and become more confident that the good times will continue. Improved consumer confidence tends to equate to higher mortgage rates due to “higher demand” for loans; contrarily, depressed consumer confidence tends to errode interest rates.
Notice the word ‘tends’. Government intervention(as happened 2008 until recently) or other significant finacial factors can dampen the rise or fall of interest rates irrespective of the consumer who is resists getting a mortgage or a consumer run on mortgages.
Thus, updates such as Jeff gives helps keep you and I up on the economy with hints as to the direction on interest rates.
If you haven’t heard, rates have topped 4%(OH NO!) and aren’t expected to go anywhere but up.
Chesapeake Real Estate: Mortgage News