Mortgage rates moved slightly higher today as trade war fears waned for financial markets. There’s not a direct connection between trade issues and mortgage rates, but like any prominent financial news, there are usually only a few degrees of separation.
In the current case, stocks had moved quickly lower in recent weeks as the trade war potential increased. That weakness ultimately threatened to push stocks below early February’s “crash” levels. Investors assumed that additional weakness would follow if that line in the sand is crossed. With that in mind, the bond market got in position to soak up some of the panic money fleeing from the stock market. When there is extra demand for bonds, bond prices rise and interest rates fall–all other things being equal. From there, the bonds that underlie mortgage rates are another degree removed, and then lenders’ utilization of those bond prices in deriving a final rate sheet is yet another degree beyond that….(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Source: mortgagenewsdaily.comNew feed