Pulse on Politics: Rules of Thumb for Mortgage Rates

By chrisking • November 10th, 2014

Rates ticked up by about 1/8 to a ¼ point depending on the loan program since last month’s newsletter. What is the cause for this? First, rates dove last month as the stock market declined steeply. With the drastic improvement in the stock market, rates have climbed. Internationally, things are relatively settled between Russia and Ukraine for the moment, although we are seeing increased violence and tension in both Iraq and Israel. International turmoil = money flight into US Government Bonds = lower rates being lent. Stock prices up = less demand for bonds = higher lending rates as bond prices increase to “keep up” with stocks. These are a few imperfect, though useful, “rules-of-thumb” for the current mortgage market.

 

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