Deflation is an economic term for when purchasing power increases over time; when inflation rates go negative. It's a rare occurrence and is generally experienced from a perspective of "falling prices" on everything from fruit to tires.
Being able to buy more with less money may seem like a positive, but over the long-term, it can be awful. Deflationary cycles are difficult to break and even more difficult from which to emerge.
The chart at top shows why that is.
According to Google, "deflation" chatter is growing.
Since the start of the year, mentions of "deflation" have grown steadily, with a spike in the last two weeks. It's one reason why mortgage rates have idled despite data suggested they should rise. And so long as deflation is in the news, that pattern should continue.
Don't rest on your rate locking laurels, though.
For now, deflation chatter is only that -- chatter. There's nothing to prove that deflation is truly present. Therefore, while fears are high, it may be your best time to lock a low mortgage rate. If deflation is proved non-existent, mortgage rates will zoom.
To get a mortgage rate quote, start here.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
Deborah C. Television Crewer
The Mortgage Reports is part of my morning routine. As I read, I learn more, and have come to understand the mortgage industry. I can't thank you enough!
Michael J. Network Engineer
The Mortgage Reports is one of the most accurate, detailed, and informative sources of mortgage-related information on the internet.
Theresa D. President, Title Services
The Mortgage Reports gives me an overview of what's happening with mortgages both locally and nationally. I really enjoy it.
2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)