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Mortgage Rates Relatively Unchanged Despite Stock Losses

Conventional wisdom holds that interest rates tend to move in the same direction as stocks.  This makes logical sense from a classical investment portfolio standpoint.  If investors are selling stocks to buy bonds, the prices of stocks would fall and the price of bonds would rise.  When bond prices rise, rates fall.  But even with today’s heavy losses in stocks, mortgage rates barely budged today. 
The reality is that the “conventional wisdom” is far from bulletproof, even though there are lots of past examples that support it unequivocally.  Beyond that, bonds are their own animal.  If they have strong enough reasons to avoid going somewhere, it’s going to take a very big move in stocks to get them to go somewhere else–bigger than we saw today….(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

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