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The Impact of the Banking Crisis on Mortgage Rates

Are you in the market for a mortgage? Are you wondering what impact the banking crisis and economic uncertainty might have on rates? It's worth looking at how this situation could affect your mortgage rate. Let’s break down what you should know.

Mortgage Rates and the Economy

Mortgage rates are largely driven by the economy. When times are uncertain, lenders tend to become more conservative in their lending practices, which generally means they raise interest rates to ensure they get repaid. So if there is a banking crisis or other economic uncertainty, it is likely that mortgage rates will go up, making it more expensive for homebuyers to borrow money.

Gauging Mortgage Rates During Turbulent Times

It can be difficult to predict exactly where mortgage rates will go during tumultuous times like we are currently experiencing. However, there are some indicators that can provide insight into where the market is headed. For instance, if the Federal Reserve lowers its target interest rate, then that could signal that banks may be willing to lower their own rates as well. Additionally, if unemployment increases or consumer confidence drops significantly, then it is likely that lenders will raise their interest rates in response.

The Benefits of Low Mortgage Rates

Fortunately, even if mortgage rates rise due to an economic crisis or other factors, there are still ways to take advantage of low-interest rates while they last. By shopping around and comparing different loan options from various lenders, homebuyers may be able to find lower-than-average rates—even during challenging times—and secure a good deal on their loan. Additionally, many lenders offer discounts for certain types of customers (e.g., first-time buyers) so it pays to do your research before committing to any particular lender or loan product.

While large, out-of-state banking systems are experiencing uncertainty; much of it has to do with their portfolios. For example, Silicon Valley Bank has been known to favor high risk investing and grew exponentially within the last 5 years. While rapid growth is impressive in tech, it is concerning in banking. Community banks on the other hand, tend to be more fiscally conservative. They will be able to navigate the local economy. While the majority of the US struggles, North Dakota remains strong with low unemployment and high growth.


Regardless of what’s happening in the economy or financial markets, it always pays to do your research when shopping for a mortgage loan and compare different loan products from various lenders before committing to one particular deal. This way you can make sure you get the best possible rate—even during turbulent economic times like we are in now—and save money over the long run. While large online lenders can be appealing, they may be difficult to get a hold of when needed.

With careful planning and due diligence on your part, you should be able to find a great deal on your next mortgage loan regardless of what’s happening with the banking crisis and other global economic events!

At Proven Realty we ensure to give our clients the best solution to navigate these difficult times, with our extensive knowledge, experience, and network, we provide the best way forward to match our client’s needs and preferences. Give us a call and we will be honored to guide you every step of the way.

Proven Realty

Experience | Service | Results

Call us: 701-380-4816

3210 27th St W, Suite 207, Williston, ND 58801

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