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New home sales are down - will rates keep dropping?

I read the MBA report for October - the new home sales are down over 2%. If this trend keeps up, do you see the rates continuing to heavily drop because of? by dmiller256 from Toluca Lake, California. Nov 16th 2018 Reply

Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,409 contributions

Increased home sales, or lack thereof, have absolutely nothing to do with mortgage interest rates. Mortgage interest rates have climbed steadily in a two-step forward, one step back pattern - and should continue to do so based on the overall economy, jobs, etc.

Nov 26th 2018
William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

As long as the economy continues to rise, expect mortgage interest rates to go up.. As Joe said, home sales and interest rates do not feed off each other... Rates are driven by economic factors which affect Mortgage Backed Securities (MBS, a Bond associated with mortgages sold to Fannie Mae, Freddie Mac) and when the economy surges like it has, then the stock market looks very attractive.. but the bond market (*where interest rates are driven by).. get ignored.. in order to attract investors' to the bond market, they have to offer higher returns.. and the only way to offer higher returns is to charge more for a mortgage loan.. . I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Nov 27th 2018
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