Were The Experts Right About The Mortgage Market? A mid year look back

Were The Experts Right About The Mortgage Market? A mid year look back

Predictions are risky businessOn a day where US jobs came in below expectations and investors take shelter in bonds its a perfect day to remember the year is half-over. It’s an opportune time to take stock of analyst predictions made at the start of the year, and to recognize that the “experts” can be wrong as often as they are right.

For as much experience and authority an expert brings to the conversation, though, nobody can accurately predict the future.

Looking Back at Mortgage Predictions

Looking back to December, some housing analysts called for a market rebound this year; while others called for a fall. With respect to mortgages, some said rates had nowhere to go but up; while others expected more dips.

As a layperson, how do you know who will be right?

In short, you can’t.

Predictions are a tricky business because they’re guesses about the future based on the world as it exists today. When the predictions listed earlier were made, the world was a different place.

A lot has changed since January:

  • Slowing job growth has suggested to slower U.S. economic growth
  • Food and energy costs have spiked, adding inflationary pressures to the economy
  • Eurozone debt issues have grown, punctuated by a near-Greek default
  • Tsunamis have caused widespread damage in Japan
  • Earthquakes, floods and volcanoes have harmed economic output

None of these events had occurred as of December, when the original predictions were made. Yet, each of these developments has made a deep impact on housing, and on the economy.

Looking Forward in 2011

So, what’s a Pleasanton homeowner to do? Think of the present bigger picture instead of what once was.

First, mortgage rates are low today — extremely low by historical standards. Second, home values have been slow to rebound through most U.S. markets. Combined, these factors have made homes more affordable than it any time in recorded history. It’s not only cheap to buy a Bay Area home right now, it’s cheap to refinance one, too.

Analysts are saying the home prices will rise this year, and mortgage rates will, too. Those predictions may ultimately be proven true. Until the future arrives, though, those predictions are just guesses.

Have a Plan for your Mortgage

If you’re considering a home purchase or you’re on the fence for a refinance it is a great time to look at the big picture. Interest Rates are low. The risks of rates jumping on any given given news is always there. I love to work with readers that find my information on the Mortgage and Housing Market helpful in your decision making process. As a Mortgage Planner at Vintage Mortgage Group in Pleasanton I am in a unique position to help you capitalize at any point in the market. Contact me below today to help you with your purchase or refinance.

 

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