Mortgage Rate & Market Update
From my favorite lender, Jeremy House at The Vision Lending Group!
We are seeing some continued relief in the mortgage bond market and as a result interest rates are working themselves down. Since August 6th bonds have seen an increase of 181 basis points!! That has resulted in 30 year fixed rates declining approximately .5%. Much of this is due to several officials commenting positively on inflation and some easement in gas prices. The reduction in gas prices has started to relieve overall inflationary fears.
Strange as it may sound, the uncertainty of the overall health of Fannie and Freddie has also helped bond prices increase and mortgage interest rates decrease. What happened here is a good old “flight to quality.” When a company as large as Fannie or Freddie is flirting with trouble, its stock becomes a bit less attractive to traders. As a measure of security traders will shift their money over into the bond market to protect their investment. The same happens in reverse – if the bond market is struggling you will often see the stock market feed off of that as traders shift their capital over to stocks to reduce their losses in the bond market.
The talk at the latest Fed meeting included hints of a FFR hike in the distant future – yet another plus! It shows that our Fed is at least thinking about and is contemplating a solution to our “inflation situation.”
All of this and more is adding up to better – LOWER – mortgage interest rates.
To contact Jeremy House for more information email him at JHouse@PrimeLending.com
