I thought bad economic news was good for mortgage rates? Wow, with the news we have had lately we should be seeing rates in the 4% range!! The problem is that with all markets the people who buy the goods determine the market... overall economic conditions don't "control" any one market.
Here is an example... just because we are in a recession right now, that doesn't mean one product might now do really well. Just because the auto industry is in shambles right now, that doesn't mean that one new HOT car might not sell like crazy! It is the same with mortgage bonds... just because people don't want stocks right now, they aren't all turning to mortgage bonds.
Mortgage bonds are what directly control mortgage rates. If bonds are selling well, rates go down. Typically if the stock market is way off, our rates improve because people that were afraid to buy stocks turned to mortgage bonds as a safer investment. I think rates SHOULD be lower right now, but my opinion and $1 could buy you a coke right now. They should be lower because investors SHOULD be buying mortgage bonds like hot-cakes, but they aren't. We have seen some good days but the market is still very volatile.
The problem is that investors are very uncertain about what lies ahead. I think eventually rates are going much lower, but only time will tell.
Olan Carder
www.charlottemortgageonline.com
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