Marketers across a variety of industries spend millions of dollars every year to understand consumer behavior. From food to music to clothing and more, organizations are very interested in what drives people to buy.
Like any other purchase decision that consumers make, buying a home involves a great deal of psychology. Unlike those everyday, run-of-the-mill purchases though, buying a home is a major decision. It is all the more important, then, to understand what is going on in the minds of home buyers.
From the perspective of mortgage professionals, the psychology of home buying often boils down to interest rates. But, it's not really about how low the rates are; it's about how low the rates are perceived to be. If we look at the long term, historic trend of interest rates, it tells one story. If, however, we look at the month-to-month changes to rates, it tells quite another story. Most people pay more attention to the later. They don't care how rates have changed over the past ten to twenty years; they care how they have changed over the last few months.
As mortgage professionals, we need to always have an ear to the ground. We need to be listening to what people are saying about the rates. Sure, it's a good idea to follow the market and see what rates are actually doing. But, what really matters is what people think about the rates. And people are talking about it -- all we have to do is listen.