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Recent Bank Collapses & What it Means for Mortgage Rates

What’s Going On With Mortgage Rates

Historically, mortgage rates have followed the 10-year U.S. Treasury yield. A growing number of investors, concerned about instability in the banking sector, are now fleeing to the safety of these government-backed bonds. An increase in bond prices means lower yields—and lower mortgage rates.

But, this situation is rapidly evolving. On Wednesday, the U.S. Federal Reserve hiked interest rates by a quarter of a percentage point as it continues its efforts to fight inflation. It also hinted that its series of rate hikes may be nearing an end.

Economists at the Mortgage Bankers Association (MBA) and National Association of Home Builders predict that this could put further downward pressure on mortgage rates.

“Neither a fragile banking sector nor a slowing job market prevented the Federal Reserve from increasing its short-term rate target again today, in line with market expectations. However, with this increase, we expect this is the peak rate for this cycle, and potential homebuyers and their mortgage lenders may be breathing a sigh of relief. We continue to expect that mortgage rates will drift down over the course of the year as the economy slows, as we move closer to the Fed lowering rates beginning in 2024, and as financial market volatility finally begins to settle down.” – MBA SVP and Chief Economist Mike Fratantoni

However, no one can predict with certainty how the market will react to the Fed’s policy moves—or how the banking crisis will play out and ultimately impact rates.

Bottomline: We could see some major volatility in mortgage rates in the coming months.

What All This Could Mean for You


If you have considered buying a home, it’s important to be aware of the situation and to be prepared to lock in a low rate when the time is right. A lower mortgage rate could potentially save you hundreds of dollars on your monthly payment, so you can’t afford to miss out.

It’s also going to be crucial to work with knowledgeable real estate professionals (like us!) who are monitoring this situation closely as it continues to unfold. We can also refer you to a trusted mortgage professional, who can help you get pre-qualified for a home loan.


A further dip in mortgage rates could bring more buyers to the market. These buyers may want to act quickly in case rates rise again.

If you’ve been on the fence about selling your home, now may be the perfect time. We can help you prep your home and get it listed quickly to take advantage of a possible increase in demand.


Depending on the terms of your current mortgage, you could save a bundle by refinancing if rates fall significantly. Let us connect you with a mortgage professional to discuss your options.

What Steps You Should Take Now

You don’t want to miss out on this potential window of opportunity! Reply to this email or give me a call today to schedule a free consultation so you can be prepared.

And as always, don’t hesitate to reach out with any questions about this or other real estate issues. I would love to hear from you!

All the best,




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