"How do you know whether rates will remain low?"
A client of mine asked me that earlier today! It was a great question!
Rates move daily...but here's how it works...
Stocks and Bonds compete for the same investment dollar. This means that investors can choose to invest their money in the Bond Market or, they can choose to invest their money in the Stock Market.
When the economy is doing bad, it creates negative consumer sentiment; or in this case, negative investor sentiment. So in the face of negative economic news, such as a poor Jobs Report, investors look for a safe harbor; in this case Bonds!
Since there now exists additional money being invested into these vehicles (Bonds), interest rates no longer need to be as high in order to attract the investment (in other words, rates don't need to be sold at a higher premium to attract investors). Thus, INTEREST RATES ARE LOWER and Lenders see better pricing on their rate sheets!
If you're wondering what daily mortgage rates look like, visit the "Daily Mortgage Update" section here on The Industry Report or visit The Industry Minute for a more condensed version of these reports (don't worry, it's free to join and follow The Industry Minute).
So although bad economic news seems contradictory, we're all almost silently rooting for a slightly bad economy as in translates to greater purchasing power by way of lower interest rates.
Mortgage Planner
World Wide Credit Corporation
(323) 810-2175 | ricardo@ricardobueno.com
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