As the Federal Reserve prepares to make its next rate announcement this Wednesday, you’re likely seeing bold predictions everywhere—rates will drop! No, wait, rates will spike! 🤯 But here’s the truth most won’t say out loud: when it comes to mortgage rates, predictions are for suckers.
That’s not a cop-out—it’s reality.
Whether you’re a homebuyer trying to time your mortgage lock or just someone watching the economy, the urge to follow expert forecasts can be strong. After all, every week there’s another “top economist” predicting what the 10-Year Treasury or mortgage rates will do next. But here’s what most people don’t realize: even the pros are wrong half the time.
The Market Is Built on Guesses
Financial traders are betting billions of dollars every day trying to out-guess the market. They adjust those bets every few seconds based on news, data releases, and even rumors. If you read something that makes you think, “Ah-ha! I know what rates will do next,” rest assured—so have thousands of professionals who already moved the market based on that same information. Your edge? Gone before you ever click “lock.”
And here’s the kicker: the market doesn’t just care about being right—it cares about being first.
Many people do not realize that the mortgage program they apply for has a “set” of mortgage rates. For instance, Conventional mortgage loans typically have a slightly higher interest rate than a Government backed USDA Home Loan.
Why Predictions Feel Right (But Usually Aren’t)
The reason predictions are so tempting is that they make us feel in control. When someone guesses right, they tend to shout it from the rooftops. When they guess wrong, it fades quietly into the past.
And even when a prediction is partially right—like saying rates will hit 5% by year-end but they hit it in October instead—most people will chalk that up as a win. But was it really? Timing matters, especially if you’re deciding when to lock your mortgage.
Often times, there’s more to finding the right mortgage program, and the right loan officer than just a rate quote – what are the costs associated with the rate? Are there any perks available for Veterans, or first time home buyers? You need to compare apples to apples.
So, What Should You Do about Mortgage Rates?
Here’s the real takeaway: don’t make lock decisions based on predictions. Instead, work with your loan officer to evaluate your current situation, your risk tolerance, and your timeline. We generally do this over the phone, and it takes about 30 minutes.
If today’s best mortgage rates work with your budget and gets you closer to owning the home you love—lock it. Rates could go lower, but they could also go higher. No one, not even the most experienced expert, knows for sure.
This is the largest Investment most of us will ever make – do you want to entrust that to the lowest bidder, who has no real mortgage experience, and often times is just sitting at a phone bank.
What About the Fed This Week?
The Fed doesn’t set mortgage rates directly. It controls short-term interest rates, and its decisions can influence the broader bond market. But sometimes mortgage rates move in the opposite direction of what you’d expect after a Fed announcement.
So yes, all eyes are on the Fed this week. But don’t let headlines drive your financial decisions. The smartest borrowers focus on what they can control: their budget, their timeline, and working with a lender who keeps an eye on the market for them.
Want to talk about your mortgage rate options? Let’s connect—no crystal ball needed. Call Steve and Eleanor Thorne 919 649 5058. We’d love to share what we are seeing, and find out if now is the right time to look at mortgage numbers. MANY people are re-entering the market, and first time home buyers are absolutely finding homes that fit their budget and their lifestyle!
I try and answer all questions :)