The Fed cut rates to zero, but mortgage rates are going up. How can that be?
Imagine a new phone was coming out tomorrow, the coolest phone ever. Everyone wants it, with the cool camera, the new apps, and the awesome screen. 500,000 people (including you) want this new phone when it rolls out.
But the factory is struggling just to get 50,000 phones made, and the shipping company is hiring extra help just to get those phones shipped out.
People keep signing up for this new phone too, but the manufacturer is worried about getting enough parts to make more, and doesn’t have the warehouse space to hold all that inventory anyway…
So the manufacturer decides to raise the price of the phone.
To double it in fact, slowing down the orders and covering the extra costs of running production 24 hours a day. That way, when the supply is available again, they can just lower the prices and the orders will pour in.
Now, imagine that the phone manufacturer is your mortgage company. This is why mortgage rates are actually on the rise, despite improving factors that normally would help bring lower mortgage rates.
Contact me directly if you want to find out how I can help you be ready to lock in a low rate when they do lower again for a brief window so you don’t miss out again.