Mortgage rate
speculation by economists is inevitable. A raise indicates a rising economy, easy lending and more mortgages. A fall occurs in tough times, with lending freezes and there are fewer mortgages. There are a few key indicators that economists use to gauge the mortgage rate's future. Using these tools, it is much easier to accurately predict the future of the mortgage rate. This article discusses those key indicators, and make mortgage rate predictions from them.
Instructions
1. Look to the past. Historical data is a good indicator of what will happen with mortgage rates. Similar situations lead to similar outcomes. Also, recent history reveals the current trend. Further future predictions require more research into past scenarios and their outcomes. Don't jump to conclusions without researching causes. If a market drop occurred in the past, make sure it was the market and not an outside issue, such as financer problems or bad decisions by mortgage companies.
2. Note the current climate. The economic climate dictates whether rates will rise or fall. If the economy is on the upswing, lenders are lending money and mortgages are easy to get. In these times, expect to see the rate rise. However, if money is tight and mortgages are hard to come by, rates will drop.
3. Watch for changes. Key financial players resigning, announcements regarding rates, or planned rate changes have an effect on the market, and in turn on mortgage rates. Major players to watch are the lenders, since they are responsible for financing people into homes. If they begin having problems, there is a good chance the market will droop.
4. Be cautious. Mortgage rates don't jump or drop rapidly. The change in mortgage rate is minute. Don't expect a change of more than a percent of a percent. Keep in mind that the rate will likely never fall to zero or rise above 10 percent, even in the craziest market conditions.
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