Since the market is so incredibly volatile now and we am getting so many questions on what is going on with mortgage rates, I thought I would summarize what has been happening for everyone:
Probably one of the best ways to know how mortgage rates are faring each day, is to follow how the stock market is doing, as typically when the stock market is doing well, mortgage pricing is getting worse, and vice versa. This is because investing in stocks and investing in mortgage backed securities are two competing investment vehicles. Hence, when stocks are doing well, investment dollars are leaving the MBS (Mortgage Backed Security) and Bond (T-Bill) market, chasing higher yields in the stock market. When this happens, traders in the Bond and MBS market have to counter that runoff with higher yields to attract buyers to their products, hence higher mortgage rates. To walk you through this in the real world, the stock market dumped last Friday, and subsequently, we saw the best rates we have seen since 2003 when rates hit a 50 year low. Then stocks rebounded Monday (1,294 point gain) and set a record one day improvement, which triggered two mid-day mortgage rate changes for the worse. Then Tuesday, stocks lost ground again (785 point loss) , and mortgage rates improved. Wednesday the reverse happened, with stocks improving (1,173 point gain), and mortgage rates increasing (two mid-day rate changes for the worse). Today, stocks started down 600 points, and a better day for mortgage rates (so far……). The purpose of this summary is to illustrate the volatility in the market we are experiencing every day now. HENCE, DON’T THINK RATES ARE JUST DROPPING BECAUSE OF THE FED CUT AND THE CORONA VIRUS FACTOR CAUSING WORLDWIDE ECONOMIC DISRUPTIONGS. What we have learned over the last three decades doing this is that there is a good reason why we hit this TEMPORARY “WINDOW” OF LOW RATES. I stress the word “Temporary.” The stars have aligned for us all that have mortgages. Low inflation, solid real estate equity positions, a strong job market, and this coronavirus scare causing major supply line disruptions worldwide, which is creating major fear in the financial markets. THIS SPELLS OPPORTUNITY FOR HOMEOWNER’S THOUGH, SO KEEP PAYING ATTENTION AND TAKE ADVANTAGE OF THIS “WINDOW” WHEN YOU ARE READY TO JUMP IN. As stated, this “window of opportunity,” does not open that often (the last time was in 2003). Take advantage while it is here. When they get this worldwide coronavirus contagion under control, money will flow back in the stock market and mortgage rates will retreat to their pre coronavirus scare levels.
More to follow. Hopefully, this helps you understand what we are dealing with on a daily basis. Unfortunately, the media does not do a good job of explaining this all to you so there is a lot of mis-information out there. We are here to give you quotes on where rates are at for your situation when you want to either call or e-mail us:
Ken Thayer email@example.com 949-852-0400., ext. 209
Crystal Lopez: firstname.lastname@example.org 949-852-0400, ext. 306
Karen Gledich email@example.com 949-852-0400, ext. 241