Think Fast! Mortgage Rates Change Every 3 Hours, 32 Minutes.

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Mortgage Rate Velocity — the speed at which mortgage rates change — remains high.

It’s bad news for rate shoppers and home buyers because rapidly changing rates makes it tough to comparison shop lenders. In the time it takes to find the lowest rate, the mortgage market moves.

In March, mortgage rates changed every 3 hours, 32 minutes on average.

Why Mortgage Rates Change

When you ask for a mortgage rate, the price from your lender is directly related to the Wall Street-pricing of a mortgage-backed bond.

Like everything else in finance, the price of these mortgage bonds is based on the current supply and demand. Sellers of bonds create supply. Buyers of bond create demand.

At any given moment, the number of sellers and buyers is in flux. Sometimes, buyers outnumber sellers and prices go up (and rates go down). Other times, sellers outnumber buyers and prices go down (and rates go up).

These shifts occur minute-by-minute.

Thankfully, mortgage rates don’t change as often as their underlying instrument. Instead, they tend to stay put until bond prices displace by a certain amount — usually 25 basis points. When that 25-basis-point threshold is crossed, mortgage rates change.

In March, we crossed that threshold a lot.

Mortgage Rates Are “Good” For Less Than 4 Hours

In March 2011, lenders issued 2.26 rate sheets per day. This means that mortgage rates changed every 3 hours, 32 minutes on average last month.

It also means that your rate quote from yesterday is 100% useless today. That non-binding quote is “expired”; a relic of yesterday’s action between buyers and sellers.

When you get a mortgage rate quote in market that moves this fast, you lose your ability to “sleep on it” and your ability to “think on it”. As you wait to choose lenders, mortgage rates move right under your feet.

Take Control Of The Mortgage Market

I am an active loan officer and I watch real-time mortgage rates all day long. I post my notes to Twitter, too, and occasionally to Facebook. Follow me there and you’ll get my alerts for free. This becomes critically important because I also send advance notice of when mortgage rates are about to change.

Follow me online. You’ll stay ahead of the market, and save yourself some money.

But, remember. Being “aware” is just part of being ready. You’ll also need your loan application on file with a lender, and queued to locked before mortgage rates start moving. Once they move, it’s too late.

Give your application now. It’s free and 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 move fast. Be alert and ready to lock.