The Media Can Be Downright Silly

July 10th, 2012

The media causes hysteria. It is what they are paid to do. As a newsperson you have to make something sound alarming, even if it is not, to attract eyeballs, to sell ad space. This is positively ridiculous, but I guess somehow the bills have to get paid, and in the news world, it is with ads and marketing. But it would be nice if consumers remembered this, and took a harder look at some news reports and applied a little logic. Below is a perfect example of something the media typically makes a mountain out of, when its barely a mole hill. Below is an example of an article that goes beyond the pale.

“Mortgage rates smash old record: The rate for a 30-year, fixed-rate loan, the most popular mortgage product, dropped to 3.62% from 3.66% last week.“

This article is absolutely preposterous, and numerous mainstream media outlets reported this. This is typical media distortion, using extreme words, to make people look and listen, to sell more ad space.

First, interest rates falling from 3.66% to 3.62% is hardly a “record smashing” event. It is .04%, which barely even moves the needle on any interest rate quotes.

Also, the media, typical of their vague reporting, only reports rates for Conforming loans which are loans below $417,000. They never mention that there are different rates for different loan sizes, and different rates for different property types, etc. More on this here.

We have set the record lows for all of history recently when rates went down a few more ticks below what rates were one quarter ago. And that is great. But I am not sure after breaking new ground in history that they can go down another hunk, as the media suggests. If you believe the words the media used you would think rates are falling one half of one percent every week! The reality is that rates are at a new historical low which is just a minor fraction or two below what were already very attractive rates just a few months ago. Don’t let the media fool you into thinking rates are plummeting, because they don’t report the days and weeks that rates increase (because it is not newsworthy). And when rates go down a few tenths of one percent, they act like the bottom just fell out of the market. It is all media hyperbole.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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