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What Causes Mortgage Rates To Change? Insights from the Joe Metzler Team in St. Paul, MN
Minneapolis, MN: If you’ve ever shopped for a mortgage, you’ve likely noticed something frustrating: the rate you were quoted in the morning might change by the afternoon. At Cambria Mortgage’s Joe Metzler Team, serving St. Paul and the greater Twin Cities, we believe an informed borrower makes the best decisions. Here’s what really drives those daily—sometimes hourly—rate fluctuations.
Mortgage Rates Change Constantly
It’s perfectly normal to see one or more rate changes in a single day. In fact, it’s unusual not to. A “rate change” isn’t always just the percentage; it can also mean a shift in the points required to secure that rate. A rate offered with “no points” in the morning could cost a quarter-point by afternoon. That’s why timing matters.
Debunking the #1 Myth: The Federal Reserve
You might be surprised to learn that long-term mortgage rates (like the 30-year fixed) are not directly set by the Federal Reserve. In fact, a Fed rate cut can sometimes cause mortgage rates to rise. The connection is indirect and often counterintuitive.
What Really Drives Mortgage Rate Changes?
Mortgage-backed securities (MBS) trade like stocks, and their prices move based on investor sentiment. This means rates change primarily due to:
Inflation Expectations: The #1 driver. If investors fear rising inflation, they demand higher yields to compensate, which pushes mortgage rates up.
Economic Uncertainty: In times of global or domestic turmoil, investors often flee to the safety of bonds, which can drive mortgage rates down.
Stock Market Volatility: Money flowing into the stock market can pull funds away from bonds, causing rates to rise. When the market falls, money often moves back to bonds, pushing rates lower.
Economic Data Reports: Key indicators like the:
- Unemployment Rate
- Consumer Confidence Index
- Durable Goods Orders
- A strong report suggests a robust economy, often leading to higher rates. A weak report can cause rates to fall.
Why You Can’t Trust Old News or Billboards
There is no “delay.” Rates change instantly as new data hits the market. Newspaper quotes, radio ads, and billboards are inherently outdated the moment they’re published. They also lack the critical details—like points and fees—that define the true cost of your loan.
The Real Question Isn’t “What’s Your Rate?”
Most lenders in any general area can offer nearly identical rates at any given moment. The difference lies in the math behind the rate. The right question is: “What is the total cost of this loan for my unique situation and timeline?”
Get Live Insights and Transparent Math from Local Experts
Don’t navigate this complex landscape alone. The Joe Metzler Team at Cambria Mortgage provides real-time guidance and our exclusive Total Cost Analysis—completely free. We help you see beyond the rate to make a smart, financially sound decision.
Click Here to Get Your Real-Time Rate Quote & Personalized Analysis
Partner with a Lender Who Gets It
My team specialize in providing fast, reliable pre-approvals and of course, competitive rates that will make you feel confident and ready to act quickly when you find the right home. Their local expertise in Colorado, Florida, Iowa, Minnesota, North Dakota, South Dakota, and Wisconsin ensures a smooth and efficient closing process.
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