Why Mortgage Rates Are So Low

Jim Catalano | Why Mortgage Rates Are So Low

Trick or Treat

Mortgage bonds remain near 18-month highs, which has played a major role in helping mortgage rates reach 18-month lows. What could continue to fuel lower mortgage rates is the potential bull market in the US dollar, which has been predicted for a number of years by well-known investment and economic advisor, John Mauldin. This has it’s own consequences to the global economy, but for homeowners and those in the market to purchase a home it should be pretty good news.

Breathe.

This week, beginning today, the economic calendar is full and we could see a lot of volatility in the markets. Investors in the market will no doubt be closely watching the Feds intentions to Quantitative Easing (QE) and it’s bond buying program. In addition, today we’ll get the Pending Home Sales report.

On Tuesday  we will have a slew of reports that include the S&P/Case Shiller Home Price Index, the Durable Goods Orders, and the Consumer Confidence report.

On Thursday there is the Weekly Initial Jobless Claims and the first reading on the third quarter Gross Domestic Product.

Friday is no day in the park. We will get reports for Personal Income, Personal Spending, Personal Consumption Expenditures, Chicago PMI, and the Employment Cost Index.

Keep in mind weak economic news generally causes money to flow out of stocks and into bonds, thereby boosting bonds and improving home mortgage rates. Strong economic news generally has the opposite result, which increases home mortgage rates.

If you have questions regarding refinancing or purchasing a home please contact me. I would be glad to answer any questions you may have.

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