We continue to see home loan rates hover near three-year lows. Some would even go as far as saying rates are going to push even lower at some point and the consensus is that they may be right. Are they wrong? What if the current rates are as low as they will go?
Yes, it would be wise to lock in your rate on the current market.
Here are three reasons rates have bottomed - at least for now:
1. Solid economic numbers continue to be reported. We are seeing a strong labor market, rising wages, high consumer and business confidence, and an overall boost for housing. Remember this....mortgage rates follow the bonds and bonds hate good news. There is too much good news in our market right now.
2. Signs of improvement around the globe. One of the main items driving our rates low is the under-performance of countries around the globe. Thanks to the central bank monetary stimulus, may parts of the world are doing good. With this news, it's hard to see rates getting better anytime soon.
3. The trading action in the Treasury Market. In recent weeks, in the face of heightened fear and uncertainty surrounding the coronavirus (anything negatively effecting people global wide usually means lower rates), the 10-year Note yield (which is what the mortgage rates follow) was unable to move beneath 1.5%, which is also close to a historically low yield seen just a few times in the last decade. If the 10-year Note can't improve in the face of very uncertain news, we are likely to be at a near-term bottom.
It would likely take some further bad news, like an escalation of the coronavirus outbreak or something worse, to push the low rates even further past our current historical lows.
All-in-all, the U.S. economy is performing well, rates are near historic lows and the markets are showing sighs that this may be as good as it gets - for now. So, if you, your family and/or friends are considering a home loan, now is a terrific time to lock in at an incredible rate. Reach out to me today for a FREE mortgage analysis!
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