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There are a few common questions that mortgage professionals hear over and over again. It doesn’t matter what the market is doing or if the economy is booming or tanking. The questions are the same. They are:

1. Is this the best time to buy a house?
2. Do I have good credit (luckily, Quizzle can answer that for free)?
3. The most common of all: Are mortgage rates headed up or down?

Let’s focus on question #3, since it’s the most common. The answer may not surprise you.

No one knows.

Why don’t we know? That’s a very complicated answer which requires a PhD in economics. Technically speaking, mortgage rates are comprised of many factors which are affected by even more factors and so on… it can all get very confusing.

Keeping that in mind, there are some factors and reports that move mortgage interest rates up or down. Knowing these factors and when these reports are issued can help you understand mortgage rates and to the best time to lock your mortgage rate.

Here are some factors and reports that greatly affect mortgage rates:

• Gross Domestic Product (GDP) – The GDP determines the total dollar value of everything produced by all the people and all the companies in the U.S. It provides the best view of the economy’s overall health and determines whether the country is considered in a recession or expansion. A lower month-over-month number can cause mortgage rates to decrease.
• Retail Sales – Are consumers spending money or not? Retail sales represent two-thirds of the GDP and are a key predictor of economic growth. A month-over-month increase can cause mortgage rates to increase.
• Employment Situation Report – Measures unemployment in the labor force, as well as the number of people on government or business payrolls. Lower unemployment percentage paired with a higher payroll number can cause rates to increase.
• Consumer Price Index or CPI – The CPI is the average price we pay for goods and services. There is also Core CPI, which removes the cost of food and energy, as these are extremely volatile. A lower month-over-month number can mean inflation has ebbed, and therefore mortgage rates may decrease.
• Producer Price Index or PPI – PPI is the average price that businesses pay to produce goods or services. Like Core CPI, Core PPI strips out the more volatile food and energy prices. A lower month-over-month number can mean inflation has receded, possibly causing rates to decrease.

To find the dates these reports are issued, check the Shirmeyer calendar, but be warned: The calendar contains a lot of data and can be confusing. It’s best to work with a mortgage professional when studying this information.

You can also keep up-to-date on current rates with our mortgage recommendation calculator.

Mortgage rates can rise and fall dramatically in just one day. Understanding as much as possible about mortgage rates will help you make the best financial decisions. You’ll never completely be able to predict the future, but you can make choices that will get you the best deal when you’re better informed.

Related Info

• Check out today’s low mortgage rates from Quicken Loans.
• If you’re in an FHA loan now, find out if you could benefit from the FHA Streamline refinance loan by answering a few questions online now.
• Find out more about buying a home.
• Doing research? Learn about buying a home or learn about refinancing.

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