Mortgage Rate Velocity Speeds To 3 Hours, 16 Minutes

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Mortgage Rate Velocity — the speed at which mortgage rates change on a day-to-day basis — is increasing.

The shift makes it harder to shop for the lowest mortgage rates because by the time you’ve found them, the market changes.

In February, mortgage rates changed every 3 hours, 16 minutes on average.

Why Mortgage Rates Change

When you’re quoted a mortgage rate, it’s directly correlated to the “going price” of a mortgage-backed bond.

Mortgage bonds are security instruments bought and sold on Wall Street. And like everything else financial, the price of a mortgage bonds depends on supply-and-demand, or sellers and buyers.

At any given moment, the number of sellers and buyers are in flux; sometimes bonds are in demand, and, at other times, they are not.  It follows, therefore, that the prices of said bonds are in flux, too.

Mortgage bond pricing changes minute-by-minute.

The good news for rate shoppers is that mortgage rates don’t change each time their underlying instrument does. It would drive you batty. Instead, rates tend to rise or fall when bond prices move by a certain amount.  That amount is usually 25 basis points.

Or, stated more simply, when mortgage bonds change in price by more than a certain amount, the mortgage rates for buying or refinancing a home change, too.

In February, we crossed that threshold by a historically huge number.

Mortgage Rates Are “Good” For Less Than 4 Hours

In February, lenders issued 2.45 rate sheets per day. This means that mortgage rates changed every 3 hours, 16 minutes on average last month.

It also means that the rate quote you picked up by email yesterday isn’t worth the pixels it’s printed on today. More than 3 hours have passed and your quote has since expired; it’s a relic of some other day’s mortgage market conditions.

In a market that moves this fast, you not only lose the ability to “sleep on it” with respect to mortgage rate quotes, you also lose the ability to “think on it”.

The longer you wait, the more likely that mortgage rates will change.

Get Protection From Mortgage Rate Velocity

I am an active loan officer and part of my job is to watch and track real-time mortgage data for my clients. A few times daily, I post notes to to Twitter and occasionally to Facebook. It’s a free and easy way for you to keep up with pending market changes and to receive instant alerts.

I typically send advance notice of when mortgage rates are changing, too, with about a 10 minute head-start. Follow me online and you’ll stay ahead of the market, too.

Remember, though. Being “alert” is just one part of being ready. You will also want to have a loan application on file and queued up before mortgage rates start moving. Lenders can’t give rate locks without an application on file.

If you know you’ll need a mortgage, therefore, give your application now. It’s free. And it’s fast. Call my office at 513-443-2020 or with some details. We’ll get started from there.

Mortgage Rate Velocity is high and markets are moving fast. Be alert and ready to lock.