Hey agents, parents, or anyone who cares! If you're someone who likes to understand what’s going on in the market — and better yet, explain it to clients, children, or your dog in a simple way — this is for you.
Let’s break down mortgage rates in a way you could explain to a 5th grader (because, let’s be real, we all appreciate when things are made simple).
Here’s what’s happening right now:
Mortgage rates are finally starting to cool off. The media might say inflation is going to push rates back up or that a housing crash is on the way — but don’t let that noise distract you.
In reality, mortgage rates tend to follow something called the 10-Year U.S. Treasury Yield. You don’t need to know the technicals — just remember this:
When that yield goes up, mortgage rates usually go up.
When it goes down, mortgage rates usually go down.
So what moves the 10-Year Treasury Yield? It’s all about investors. When big-time investors move their money out of the stock market and into safer investments like bonds, bond prices go up — and when that happens, yields (and mortgage rates) go down.
Why would investors move money out of the stock market? Usually, it’s because they think a recession might be coming. Stocks are risky, bonds are safer. So when the economy looks shaky, investors play it safe.
And guess what? Goldman Sachs just raised the chance of a recession in 2025 from 20% to 35% — that’s a 75% jump in probability. If that trend continues, we’ll likely see mortgage rates keep coming down.
And no — a housing crash isn’t coming. A crash would require way too many homes on the market (a surplus), and we’re nowhere near that right now. If anything, housing inventory is still tight.
Bottom line for your clients:
Rates are easing down.
Recession fears = lower rates.
No housing crash in sight.
Agents: Hope this helps you feel more confident when you’re having those market conversations with your buyers and sellers!
P.S. If you're feeling crazy and want to get a bit into the technical stuff about the market and my forecast from a few months ago, check out this article I published in January.
With a rich background spanning over a decade in the mortgage and real estate sectors, Terry Roberts has become a cornerstone in guiding over 10,000 clients through the complexities of the home purchasing journey in the United States. His expertise covers a broad spectrum of housing loans including conventional, FHA, VA, and cutting-edge new construction financing options.
Emerging from challenging early life circumstances, including teenage parenthood, dropping out of high school, and facing homelessness, Terry's determination led him to serve in the US Marine Corps. This decision was driven by a commitment to safeguarding freedom and securing a better future for his family. His active duty service in the US Marine Corps, marked by nearly a decade of dedication, instilled in him a profound desire to assist fellow Americans in achieving homeownership, a cornerstone of the American dream that he fiercely believes in.
Terry leverages his profound understanding of the real estate market to empower individuals in their pursuit of property ownership as a strategic investment for wealth generation. His journey from adversity to becoming a beacon of hope and guidance in the real estate domain is not just inspiring but a testament to his commitment to his clients' success.
Connect with Terry Roberts, a proud USMC Veteran and Senior Mortgage Broker (NMLS 397987), for expert guidance on your path to homeownership. Visit www.TerryRoberts.com at E Mortgage Capital, where every client's dream is approached with the respect and dedication it deserves.
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