June 21, 2024
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June 21, 2024

Let’s Do the Two-Step!

Market Update

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Two steps forward and two steps back... that’s how it feels sometimes with mortgage rates. We keep seeing signs that the consumer is struggling and inflation is slowly going down, but we just can’t get over the skip in the record and have a sustained rally bringing mortgage rates down.

Some of the data that came out this week showed retail sales are below expectations, the consumer isn’t buying as much, jobless claims remain high, and the Leading Economic Index declined for the 25th month out of the last 26 months reported. Weak economic data almost always leads to lower rates, so what gives?

Interestingly enough, too much government spending has kept rates high.

You hear about the government deficit, but what does this mean?

Fifth Grade Economics 101: A government deficit happens when the government spends more money than it collects in taxes. Imagine if you got $50 a week for allowance but spent $60 every week. You'd be short $10. That shortfall is like the government's deficit. You would have to borrow the $10 to make up the deficit.

As of 2024, the U.S. government deficit is approximately $1.5 trillion. This means the government is spending $1.5 trillion more than it collects in taxes.

When the government spends more than it collects, it needs to borrow money to cover the deficit. It does this by selling bonds. Bonds are like IOUs that the government promises to pay back with interest.

But if there aren't enough buyers (supply & demand) for these bonds, the government has to offer higher interest rates to attract buyers. Higher interest rates on government bonds can lead to higher interest rates on loans and mortgages. This happens because when the government pays more interest, other lenders, like banks, also have to increase their interest rates to compete and attract borrowers.

This is what has been happening and happened this week. When you are talking trillions of dollars, you need a LOT of buyers, and we just don’t have enough buyers to absorb all the IOUs the government is asking for. Thus, rates remain elevated and that is another reason we have not seen mortgage rates drop.

One other stat for you this week: the Fannie Mae Homebuying Sentiment hit a new survey low with 86% of consumers saying it’s a bad time to buy a home.

Now, there’s one of the richest individuals in the world and arguably the best investor of all time, Mr. Warren Buffett. When the herd is going one way, he usually goes the other because he knows the herd will eventually follow him.

Homebuyers should be the buffalo and run into the storm as opposed to the cow that tries to run away from the storm and is too slow to beat it. The herd eventually follows. 🦬

Video Transcript for
Let’s Do the Two-Step!
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Bill Gaylord
Gaylord-Hansen Team at CrossCountry Mortgage

The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.

Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (

Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.

For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.

Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit

Mortgage News Daily (MND) is a trademark of Brown House Media, Inc. Zillow is a trademark of Zillow, Inc. CrossCountry Mortgage has not been authorized, sponsored, or otherwise approved by Brown House Media, Inc. or Zillow, Inc.

Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.

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