In a year of market volatility, brokers are stressing that waiting for rate drops can be a losing battle
It has been a challenging year for mortgage brokers trying to navigate a tumultuous market. Tariffs dominated the early part of the year, and now a government shutdown leads the headlines.
That turmoil continued on Friday when the White House announced the start of layoffs, expected to number in the thousands and likely continue to weigh on an already softening jobs market.
In the meantime, mortgage rates have fallen over the last three months, although they have bounced around over the most recent three weeks. For brokers advising clients, it has been challenging to forecast just where market conditions are heading.
Kristi Hardy (pictured top) is an executive vice president, area manager, and senior loan officer with Atlantic Coast Mortgage. She said the unusual outside pressures have caused brokers to question what they’ve known for years. She said the message is clear: lock your rates.
“I'm just telling people to lock because it's so uncertain, and nothing is like it should be,” Hardy told Mortgage Professional America. “And we've had this ever since COVID. Everything that we knew in the past that affected mortgage rates is not affecting mortgage rates. It’s like nothing we've ever seen as mortgage lenders. We have not seen such a lack of response to indicators that usually cause a huge effect. So everything is just sort of flipped and unknown.”
She said even if customers lock in a rate higher than they were hoping for, they will have the opportunity to refinance later.
“If rates do come down, there's always the refinance,” Hardy said. And I do truly believe we are going to have a refinance opportunity in the next couple of years. You know, these rates are not that bad. I'm still able to get people into the fives right now, which is super solid.”
Time to act
Kirk Todd, branch manager and senior loan originator at Choice Mortgage Group, is telling his customers the same thing. The veteran has seen the ups and downs of the market over the years, and he’s telling customers to act if they see something they like.
“I've been encouraging clients that if you can afford a house today at these interest rates, now's the time to act on it,” Todd told Mortgage Professional America. “In most markets, when you start to see rate declines, you're going to see more competition in the market. You're going to see more buyers because it's just going to let more buyers in.”
Eric Hagen of BTIG says falling rates and steady capital flow leave the housing market stable despite the shutdown. He notes lower volatility, strong non-bank originators, and resilience unless the disruption stretches beyond two weeks.https://t.co/Dr1Q64vCiv
— Mortgage Professional America Magazine (@MPAMagazineUS) October 2, 2025
The other advantage of jumping into the market as soon as possible is that it allows new homeowners to begin building up equity. Even though home prices have cooled in recent weeks, the historical trends show values will continue to increase gradually. Then, when those buyers are ready to refinance, they’ll have the option to do a cash-out refinance if needed.
“Theoretically, property values will continue to go up,” Todd said. “If you can get in now and afford it now, then you're set up for refinance to a lower rate. Hopefully, in that period of time, it will have built up a bunch of equity. Even if appreciation goes back to 2.5% to 3.5%, which is a normal market, that's a lot of money when you compound it.”
Economists frustrated as well
It’s not just veteran brokers who are struggling with rate forecasts. Selma Hepp, chief economist at Cotality, is one of the most respected voices in the industry. Even she is stunned by some of the challenges in market forecasting.
“It's so hard to make a call these days, because you expect things to work in one direction, because they've always worked in that direction, and now they're working in a different direction,” Hepp told Mortgage Professional America. “I'm having a hard time these days, really figuring out whether we're going up or down or left or right. I don't have a good sense of things. I really don't.”
Rates started falling prior to the last meeting of the Federal Reserve, and then moved back up after the central bank cut rates by 25 basis points. This week, rates dropped a bit again, according to Freddie Mac. Looking back at the 12-week trend (table below), rates have come down significantly over the last three months.
For the Fed and economists like Hepp, all they can do is make their best guess based on the data available. Right now, some of that data is limited due to the shutdown, making the forecasts harder.
“You just take the best data or information you have in the moment you say, ‘Okay, as of this moment, this is what I think,’” Hepp said. “This may change tomorrow, but as of this moment … so, yeah, it's been really difficult. I feel sometimes when I'm asked about mortgage rates, I don't know what to say.”
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