Among the most challenging aspects of shopping for a mortgage is how rates change constantly. It’s hard to pin them down.

For example, in 2011, mortgage rates have expired every 3-and-a-half hours, on average. That’s fast.

There’s two main catalysts for changing mortgage rates.

The first can be grouped as “scheduled events”; the planned release of market data which includes the Existing Home Sales report, or a scheduled government statement such as when the Federal Open Market Committee meets. When the outcomes of these event-types either exceed, or fall short, of Wall Street’s expectations, mortgage markets react.

Home buyers and rate shoppers in St Paul realize this as higher (or lower) mortgage rates.

Then there’s the other type of catalyst — the “unscheduled event”.

Unscheduled events take many forms and are often called “surprise developments”. The Federal Reserve’s plan to inject $750 billion into mortgage markets in 2009 was one such surprise. Most geopolitical events fall into this category, too. 

Unscheduled events are often unsettling to Wall Street because investors don’t have specific contingency plans for them like they would if, say, this month’s jobs report comes back exceedingly strong. For example, investors didn’t expect North Korea to fire missiles over Japan in 2008, nor did they expect a volcano to erupt in Iceland last spring.

When unscheduled, unexpected events occur, the market’s first — and natural — reaction is to scramble to make sense of it. Mortgage rates get jostled as a result and can take days to settle back to normal.

We’re experiencing an “unexpected event” right now.

In response to Sunday’s evening’s presidential address, markets are now upended. The dollar is strengthening, oil prices are falling, and stock markets are rising. Each of these items are altering mortgage rates across Minnesota. 

Even today, markets remain unsettled.

Therefore, if you’re shopping for a mortgage rate, keep one eye on the news and the other on the rate-lock trigger. During periods of unexpected activity, mortgage rates can change quickly so be ready to shop, and be ready to lock.

Mortgage markets wait for no one.