Sudden — & Unpredictable
If major changes in interest rates are like seismic events, the “tremors” are intra-day mortgage rate changes.
On a typical day, there are one or two; this Monday, there were six — all up.
To be sure, the increments are small, and the current 30-year rate is (still) a historically low 3.75% (up from a rock-bottom 3.25% a few months ago).
But, just like real earthquakes, the financial kind are (still) famously hard to predict.
Or, perhaps (too) easy, which is ultimately the same thing.
As the saying goes, “economists have predicted nine of the last four recessions.”
Predictions, etc.
Some people believe that peculiar animal behavior (by small rodents, ants, etc.) precedes earthquakes.
If that’s so, what is the equivalent for financial earthquakes?
Think, (very) small economic players closest to the ground.
P.S.: It certainly wouldn’t be good for bond holders, but what’s more important than rising interest rates is why they’re rising.
So, if rates rise as the economy strengthens — what you’d expect to happen — there should be offsetting positives for the housing market.
