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What You Can Do When Mortgage Rates Are a Moving Target

What You Can Do When Mortgage Rates Are a Moving Target

by | Apr 23, 2025 | For Buyers, Mortgage Rates

In today’s unpredictable housing market, mortgage rates seem to shift daily — sometimes even hourly. For homebuyers and homeowners looking to refinance, this uncertainty can feel overwhelming. But the good news? You can take control, even when mortgage rates are a moving target.

Here’s a practical guide to navigating rising and falling rates, so you can make confident, informed decisions.

🔍 Why Mortgage Rates Fluctuate

Before diving into what to do, it helps to understand why rates change in the first place. Mortgage rates are influenced by several factors, including:

  • Inflation

  • The Federal Reserve’s monetary policy

  • Economic growth indicators

  • Bond market performance

Because of these variables, rates can change quickly — sometimes without much warning.

🏦 1. Get Pre-Approved and Set a Budget

Why it matters: A mortgage pre-approval not only tells you how much you can afford, but it may also lock in a rate for 30 to 90 days. That gives you some breathing room if rates rise during your home search.

Bonus tip: Even if you’re pre-approved, continue monitoring rates. Some lenders offer updated rate quotes if you haven’t closed yet.

📈 2. Monitor Market Trends and Mortgage News

Stay informed by tracking mortgage rate trends through financial news, lender websites, and mortgage calculators. Pay attention to:

  • Federal Reserve announcements

  • Economic data like inflation reports and job numbers

  • Real estate market updates

Key takeaway: Timing your move in the market isn’t about guessing; it’s about staying informed.

🧑‍💼 3. Work With a Mortgage Broker

Mortgage brokers have access to multiple lenders and loan products. They can help you:

  • Compare rates quickly

  • Find special programs or first-time buyer incentives

  • Navigate rate lock options or flexible terms

Pro tip: A good broker can help you react quickly to market changes — a huge benefit when rates are shifting.

🔒 4. Use a Mortgage Rate Lock (With a Float-Down Option)

When you’re under contract, consider locking in your mortgage rate. This protects you if rates rise before closing.

What’s a float-down? Some lenders allow you to “float down” to a lower rate if the market drops significantly before you close. Be sure to ask about this feature when comparing lenders.

💸 5. Explore Adjustable-Rate Mortgages (ARMs)

If current fixed rates feel too high, an ARM might be a good temporary solution.

How ARMs work:

  • You get a lower initial rate for the first 5, 7, or 10 years.

  • After that, your rate adjusts periodically based on the market.

Best for: Buyers planning to move or refinance before the fixed period ends.

🎯 6. Consider Buying Mortgage Points

Mortgage points are upfront fees paid to lower your interest rate. This strategy can lead to long-term savings, especially if you plan to stay in your home for several years.

Example: Paying 1 point (equal to 1% of your loan) might reduce your rate by 0.25%.

Rule of thumb: Use a mortgage point calculator to see when your break-even point occurs.

🔁 7. Plan to Refinance When Rates Drop

If you need to buy when rates are high, keep refinancing on your radar. When the market improves, you can refinance to a lower rate and reduce your monthly payments.

Just be aware of:

  • Closing costs

  • Potential prepayment penalties

  • How long you plan to stay in the home

✅ Final Thoughts

Yes, mortgage rates are unpredictable — but that doesn’t mean you’re powerless. With the right tools, timing, and team, you can make smart moves no matter what the market is doing.

Remember:

  • Get pre-approved and lock in when the time is right.

  • Explore adjustable-rate options and mortgage points.

Be ready to refinance when rates improve.

Why Did More People Decide To Sell Their Homes Recently?

Why Did More People Decide To Sell Their Homes Recently?

by | Mar 3, 2025 | Buying Tips, For Buyers, Mortgage Rates

Homeowners typically slow down their moving plans as the summer months wrap up, and as a result, fewer homes are listed for sale in the fall. It’s a predictable, seasonal trend in real estate. But this year, mortgage rates came down at the same time the number of homes on the market usually starts to decline. So, what happened? More homeowners decided to sell, so more homes came to the market.

The most recent data from Realtor.com reveals that in September, the number of homes put up for sale increased by 11.6% compared to this time last year.

As the green circle in the graph below shows, the typical September decline in homes coming to the market didn’t happen – that number actually went up (see graph below):

a graph of a number of homesRalph McLaughlin, Senior Economist at Realtor.com, explains why there was an unseasonable rise:

“This sharp increase is largely due to the decline in mortgage rates in mid-August, enticing homeowners to sell.”

So, as rates came down at the end of the summer, more people jumped into the market and decided to make their move.

What Does This Mean If You’re Looking To Buy a Home?

It means more fresh options to choose from than you’ve had in a while – not the ones that have been sitting around, unsold.

But keep in mind, mortgage rates have been volatile lately, ticking up slightly in recent weeks, which could limit the number of people who feel comfortable with the idea of selling in the months ahead. And in this market, it’s mortgage rates that are largely driving homeowner decisions.

Why Buy Now, Rather Than Wait?

Whether you’re looking for a starter home, an upgrade, or hoping to downsize, you have more homes to choose from right now. And if you can find what you’re looking for, know that these new, fresh options won’t be on the market forever. So, staying on top of what’s available in your local area with a trusted agent is key.

And remember, one month doesn’t make a trend. So, what does that mean going forward? Whether more homeowners than normal continue to put their houses on the market will largely depend on what happens with mortgage rates and the economic factors that impact them, like inflation, employment, and the reactions by the Federal Reserve.

With that in mind, now might be your moment, while more homes are available – if you’re ready, willing, and able to buy this fall.

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“The rise in inventory – and, more technically, the accompanying months’ supply – implies home buyers are in a much-improved position to find the right home and at more favorable prices.”

Bottom Line

As rates came down at the end of the summer, sellers started to trickle back into the market, which means buyers have more choices right now. And working with a trusted local real estate agent is the best way to take advantage of your new options before they’re all scooped up.