Avoiding a course in Economics, let me share one of the primary causes of mortgage rate fluctuations – in a very simple manner.
When people, companies, etc., want to invest their money, they make decisions about how much risk they want to take. With our economy and the overseas economy being rather up and down (mostly down) over the past year, investors are skeptical and therefore want investments that are safe and secure. There aren’t a lot of choices for “safe” and “guaranteed” investments. But one of them is Government debt. Investors feel that if they place their money with the U.S. Government, they will surely get their money back. They won’t earn much interest, but they won’t lose any prinicipal.
As more and more investor money enters the Government safe havens, it can cause mortgage rates to fall. That’s where we are today.
How/when will it turn around? Next Tuesday, next month, next fall, next year. No one can know for sure. What you can know for certain is that you will have no warning. Zero. Nada. Investors can change the tide on a dime. Suddenly, they get word of some pending positive market change and a sudden market surge can occur. And rates can hop up in a moment’s notice. Yes, just that quick.
There are many other factors that can and do influence mortgage rates, but my point was to keep it simple.
I can’t count the number of times I have heard a borrower say, “Okay, I’ll wait until rates drop a little more.” If only I knew this would happen for I would be a very rich woman. We can’t win the rate wars. The best chance of being a winner is to make a decision based on whether what you can do today makes sense for you and your family. That same offer might be off the table tomorrow. Check here for the most recent rate updates.
Until my next post . . .
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