Loose-Cannon Mortgage Rates Are Giving Homebuyers Whiplash

Even the biggest adrenaline junkie wouldn’t want to ride this coaster: Mortgage rates are racing up only to come crashing down, then hiking up higher than before. Housing experts are saying that they've never seen this kind of volatility before, and those seeking to refinance or lock in a new mortgage may feel a bit whiplash. Rates are changing by the hour some days, and one that a homebuyer sees advertised may not be the one they end up with, even if they rush to apply that day. From the start of the pandemic, the industry has seen rates near 3 percent, where experts say they were forecasted to be, all the way up to five percent.

With the economy in near shambles, layoffs becoming widespread, and more of the country under orders to shelter in place to stem the spread of the coronavirus pandemic, historically low mortgage interest rates were one financial bright spot.

Not anymore.

Both homeowners seeking refinances and home buyers will likely be disappointed by rates that have fluctuated wildly in recent days—by the hour in some instances. That kind of volatility is unprecedented, and makes it more difficult for borrowers to lock in a low rate, say experts. And mortgage rates have surged upward despite the Federal Reserve slashing short-term interest rates.

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