It’s been a wild ride in the financial markets in the last few days. Equities markets saw a huge nose-dive, and we’ve seen a pretty good snap back… but we aren’t back to where we were. Of course, that has some impact on bonds and mortgage rates. So, many people are asking: what is going on?
Things Started Changing Last Week
It started to get weird last week on Wednesday when The Fed announced they are holding rates. In their prepared statements, they made it sound like September will be the month where they make the first reduction in the Fed Funds Rate.
Then the jobs numbers came in worse than expected, causing the bonds and equities markets to react. This is the normal reaction we would see. Money moves from riskier equities markets over to bonds, and more people buying bonds = lower interest rates. That’s how it works.
Things continued to be weird on Monday, and interest rates have been fluctuating this week. There are a lot of other things going on that are also influencing rates. Barry Habib is the bond guru that I follow, and he was talking about this crazy trade that people do in Japan, which is having a measurable impact here.
Mortgage Rates are Coming Down
The good news: from a mortgage perspective, we’ve seen rates going down. Hopefully, we will see them continue to trickle lower. But we know for sure that it will not be a straight line.
This is a quick synopsis of what I am seeing right now. From an interest rate perspective, it’s likely that we could see people flooding in to start buying. It’s also possible that we could see people start to refinance, particularly homeowners who have bought in the last couple of years.
Keep an eye out for your options. If you are wondering whether a refinance makes sense, then reach out to me any time. I just need to look at your mortgage statement and we can find your best options. Contact me anytime for more information and personalized recommendations!