Changing Daily - Interest Rates

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Real Estate Agent with Samson Properties

Interest Rates Change Daily

Interest rates change constantly, but it is important to know that rates are cyclical. If rates are currently at historical lows then we know there is a strong probability rates will go up again, and vice versa. Certain economic indicators such as unemployment data, consumer price index, retail sales data, and consumer confidence all have an effect on mortgage interest rates. But the key factor to watch is the relationship between stocks and bonds.

When the economy is slow and the stock market is "bearish," many investors move money out of stocks and into bonds and mortgage-backed securities. This causes mortgage interest rates to go down. When the economy is doing well, the stock market rallies and is considered "bullish." Investors then have a tendency to move their money out of that safe haven of bonds and mortgage-backed securities and back into stocks. As a result, mortgage interest rates go up.

 

 

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Rainer
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Jason Romrell
Business Attorney and Success Advisor - Los Angeles, CA

Rates are cyclical...for sure.  What I like about your post is that it's "educational".  It's better to know what "is" and "why" than to just let life push you around.  Thanks for the post.

Jun 26, 2008 05:02 AM #1
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