St. Cloud homeowners and the St. Cloud Realtors^® and mortgage professionals who serve them aren’t the only ones who keep an eye on the day-to-day gyrations of home loan interest rates. Every move is so consequential to the rest of the national economy that even minor tics get national attention.

That was why the January 4 pronouncement from trusted analysts at Bankrate.com, “Rates poised to stay low in new year,” came as reassuring news. Their reasoning was cogent. In addition to the Federal Reserve’s unusual promise not to raise their key Fed Funds rate “through 2023,” Bankrate pointed out that it also had “a number of tools at its disposal…that can push rates to where the Fed wants them to be.”

The goal in 2021 would be to stabilize markets, firm up debt prices, and extend the benefits that accompany a soaring stock market. Home loans were more than side issues. “Keeping a lid on mortgage rates in particular” would be a key to stabilizing the wider economy since lower mortgage rates would invigorate consumer spending. Bankrate elaborated on what St. Cloud Realtors, buyers, and home sellers have already experienced: the stimulative effect when “homeowners can cut their payments by $150, $200, $300 or more per month…”

If such expectations prove out, continued low mortgage interest rates would allow prospective St. Cloud home sellers to bide their time. There would be little pressure to seize the historically favorable opportunity.

For once, there would be at least one low-stress situation!

But—not so fast. By last Monday, the actual markets seemed oblivious to what the Fed governors and Bankrate were propounding. “Rates Rising at Fastest Pace in Months,” headlined the authoritative Mortgage News Daily. Last Monday’s rates reflected “the roughest week since June 2020 by some measures …” and, “if this drama were to conclude now, it would be that big of a deal.”

The concerns were being fueled by the changing of the guard in Washington. Increased spending, if it were to result, might help the economy in the long run—“but it does bad things for interest rates” [the bolded type was the Daily’s]. Because the government sells US Treasuries to finance spending, the result is higher yields/rates, and “Treasures correlate significantly with mortgage rates.”

By week’s end, rates had steadied—St. Cloud homeowners and prospective buyers could still avail themselves of undeniably advantageous mortgage rates. Yet, it was hard to completely ignore the shadow cast over Bankrate’s reassuring future. The soundly reasoned portrayal of sustained low-interest rates hadn’t lasted the month.

Interest rates are only one element of the complex decision to buy or sell St. Cloud homes. Call me anytime for a rundown on the latest information to help make a well-grounded decision.

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