Selma Hepp, chief economist at Cotality, said that brokers need to be honest with clients about where rates are headed rather than selling a story the data no longer supports.
“Maybe we’ve seen the best of rates for this year, and so we’ll have to wait for it to come around again,” Hepp said. “You’ve got to be honest with people. You can’t pretend something is happening when it’s not.”
Her advice for brokers was to stop talking about rate predictions and start talking about rate ranges.
“Instead of providing an expectation of lower rates, provide an expectation of range,” Hepp said. “Tell them, ‘If we’re in this range and we lock in at any point within this range, can you as a consumer afford this?’ Instead of just saying, ‘Hey, you can refi down the road.’ If you say, ‘Hey, there is a possibility of moments of opportunity, let’s get ready for it.’ That’s the honest conversation.”
What brokers are dealing with
Thursday’s reading puts rates roughly where they were in late May, when Freddie Mac reported 6.51%. Inventory remains tight, and the buyers closing deals right now are doing so in spite of borrowing costs, not because of any relief on them.