Increases in Home Loan Interest Rates | Odd use of the word “Surge”
Typical drama spin to the headline: “Real Estate Notes: Rates for 30-year home loans surge” in today’s Washington Post Real Estate Notes.
And, how ridiculous too! Since when is slightly more that 1/8th of 1% increase considered a surge? Even when compared to the historic, record low of 4.71% we saw in December 2009, current rates are just 1.5% higher than the record low. Hardly a surge. Market rates for interest rates change all of the time. And, yes, the market is poised for rate increases (recovering economy, less federal intervention in the process and anticipation of inflationary times will all impact interest rates). But, in reality, these are still historically low rates–And, absolutely a very good reason to act now if you are considering entering the market… while rates are still at record lows.
I found this chart of interest rate history at MortgageNewsDaily.com. Interest rates were significantly higher in 2000 (non-recessionary times). Certainly a leap to those levels would be considered a “surge”.
Isn’t it funny how the words make such strong impact… “up slightly” or “up-tick” or “up just over an eighth” just wouldn’t cause the same stir would it? It makes me wonder how much of or “bad” economy could be blamed on “bad” headlines. Designed to grab the reader, but don’t really paint a true picture.
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