As the real estate industry waits for mortgage interest rates to drop into a range that’ll spark homebuyer activity, guessing when rates will rise and fall has become a frustrating game for many due to how intertwined these shifts are with other economic factors.
It would be simpler if mortgage rates were only tied to housing supply and demand. But rates are affected by so much more — and the economic surprises that can pop up from one day to the next make forecasting difficult.
A prime example of rate unpredictability occurred last September when the Federal Reserve began cutting short-term interest rates. While this kind of move can push mortgage rates in the same direction, rates instead went the opposite way amid growing inflation concerns.
For Daryl Fairweather, chief economist at Redfin, the biggest surprise in the past year has been the tariff war and its impact on rates.
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Author: Dave Gallagher
