When Home Loan Rates Don’t Match All-Time Lows

Dated: 09/14/2020

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Last week, those who closely monitor St. Cloud home loan rates were treated to a literary fit of impatience by the Mortgage News Daily—usually one of the most dispassionate of mortgage journals. On Friday, it became more than clear that MND has had it! The headline read,

No, Mortgage Rates Are Definitely Not Back to All-Time Lows!

The exclamation point is a rarity from financial journalists—as are superlatives like “definitely.” The cause of the editorial apoplexy was spelled out in unequivocal terms—it was “the unified onslaught of news coverage” that had once again dispensed the now-familiar phrase about mortgage rates being “back to all-time lows.” Not so, exclaimed MND—in fact, “today’s rates are actually and unequivocally not even close [MND’s boldface] to those seen on August 4th or thereabouts.”

Casual St. Cloud readers who stopped there may have been left with the sobering impression that St. Cloud home loan rates were climbing fast—that the current mortgage market was swiftly returning (or had already returned) to more historically typical levels. But details that followed told a different tale:

·         “Are they low? Sure!”

·         “…today’s going rate for top tier clients is under 2.9%...”

·         “…originators truly may be quoting lower rates today versus early August, but they are the exception…”

So, if rates are less than 3% (for goodness sake!)—what caused the nit-pick about not being even close to all-time lows? You have to suspect that, for journalists who deal with nothing but mortgage interest rates, the difference between a tenth or two of a percentage point becomes all-consuming. The poor writers have been faced with coming up with different ways to describe “historic lows” for so long that, when they aren’t actually at historic lows, it comes as a welcome relief (vocabulary-wise). If the mainstream press fails to recognize that welcome moment, it’s too much.

For St. Cloud homebuyers whose only focus is whether the latest St. Cloud home loan rates are favorable, MND’s final sentence was more illuminating: “Bottom line, the average lender has slightly higher rates today versus last week.” Translation: extraordinary bargains still prevail.

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Noel Johnson

Passion for investing in real estate brought me to create Premier Real Estate Services in 2002. Years of purchasing, developing, and managing several rental properties, while assisting friends & cli....

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