How The Economy Affects Rates
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Rates are flat today. Today's rates with no lender fees are 3.375% APR on a 30 year, 2.75% APR on a 15 year and 2.75% APR on a 10 year. (click here for details)
Today I want to touch on some recent news that dropped rates to new all time lows once again. I know, I know, you heard this many times before and I am sure you will hear me say it again in the future. But let's break down what happened.
Check it out in today's video:
Last week the jobs report was released and it was well – weaker than expected. This news resulted in mortgage rates to dip once again. But why? Well - Lets break it down a little more.
The weak employment numbers show a weak economy. Big shocker, I know. But when news like this is released the markets always react one way or another.
So, when weak economic data is released it helps rates. Try looking at it this way. A STRONG economy would support higher interest rates. So when the data indicates a soft labor market, rates tend to fall.
This news combined with the fact the Fed may conduct further quantitative easing IF the labor markets would continue to deteriorate. This is not a guarantee However this is the assumption in the market.
Now If this would happen, and again the market is betting that it will, it would result in a flood of cash going into the demand side of the bond market. This extra demand would help drive bond prices higher and rates lower.
Remember, when bonds go up rates go down. So our less than perfect economy is one of the big reasons you see these crazy low rates.
With that being said….What are you waiting for? With rates this low you should have no excuse not to move forward. It is times like this that you should get off the fence and lock your loan.
And remember: A Rates in Motion approved lender is only a click away. Go to the GET HELP section and take advantage of todays low rates.
I'm going to leave you with this saying today. "It's better to be locked and wish you were floating than to be floating and wish you were locked." Think about it! Tune in tomorrow to find out what you can do if you locked and then rates go down.
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Let's change the way people shop for a mortgage…forever!
PS. To ask a question, get advice, or find out if you're getting the best deal possible on your loan, just post a comment below.