Monday, June 4, 2012

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.

My team and I keep a close eye on mortgage interest rates at all times in an effort to alert our clientele of opportunities to obtain lower financing. Let us know if you have any questions for us.

2 comments:

  1. This is only an extreme example of how this escape route is being used by the lenders to continue to discriminate against existing borrowers.

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  2. Great writing and thank you for sharing it with us I really like that …
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    ReplyDelete