Media does it because it gets clicks (which is their real business)
Last week I got an email with the subject line:
Breaking news: Mortgage demand sinks nearly 11% as rates hit monthslong highs.
Normally, I try not to consume too much news. It’s a distraction, and the truly important stuff usually finds its way to you anyway.
But this is kind of what I get paid to know, and it didn’t line up with what I’d been seeing in the real world. So I clicked.
I mean, an 11% drop in mortgage demand in a week? That can’t be good, right?
As always, the answer in real estate is: it depends.
It helps to remember there are two types of customers in the mortgage market.
People borrowing to buy.
And people refinancing or pulling equity.
That second group doesn’t really tell you much about the health of the housing market. It mostly reflects where rates are.
If rates go up, fewer people refinance.
That’s not a signal. That’s math.
Refinance applications fell 19%. Which is a big number, but it makes perfect sense. If you already have a 3% loan, you’re not jumping into a 6% loan. And even the ones who might consider it are probably waiting to see what rates do next.
Now look at the part that actually matters.
Purchase applications?
Up 1%.
In other words, basically flat. Maybe even a little stronger.
That’s not a collapsing market. That’s a steady one with some crosscurrents.
This is really bad news for people who make their living selling mortgages. The rest of us, not so much.
This isn’t to say everything is perfect. There could absolutely be challenges ahead. Rates matter. Confidence matters. Inventory matters.
And yes, something could change tomorrow that makes this look outdated. And hopefully something didn’t happen between the time I wrote this last week and when it posted today. If so then I look pretty silly right now.
But that’s not the point.
The point is that most media outlets are not really in the business of providing information.
They’re in the business of gathering attention and selling it.
You are the product.
The more dramatic the headline, the more clicks.
The more clicks, the more valuable the audience.
So you get headlines about “demand sinking,” when the part of demand that actually reflects the housing market is holding steady.
That doesn’t mean ignore the news.
Just understand the incentives behind it.
Because once you do, a lot of these “shocking” stories start to look pretty ordinary.
PS- If you own rural land, your values are (indirectly) tied to the strength of the housing market. But from what you saw above, it’s kind of hard to tell noise from signal at times.
You’re probably not looking to sell today, but is it a bad idea to stay on top of things?
Enter the MBR Land Reality Check.
A current opinion of value based on actual recent sales, market activity and (yes) external factors.
It’s free this month, never any obligation or pressure to list.
PPS- If you’re not ready for the MBR Land Reality Check but enjoyed reading, you can get these in your inbox. Usually daily, just enter your info below.
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