While we are all getting a little freaked out looking at our 401K’s, this past month has provided opportunities to refinance and purchase new homes that have not been seen since 2012 and prior to that you had to go back to the 1940s to see interest rates as low. These rates are being driven lower because investors flee to the safety of bonds in times of turmoil. The Coronavirus has been the catalyst because of what started in China is starting to spread to other parts of the world including the United States. Unfortunately, because China reacted slowly to the initial outbreak, the spread of this virus was all but certain. In order to contain it, countries like China are locking down entire cities where in other parts of the world they are canceling school, large gatherings, corporate meetings and the list goes on and on.
This disrupts business and industry in a huge way. Bottom line is that investors feel, that as corporate profits and the economy slow, a recession is inevitable. Hence, you have seen stocks cratering and investors fleeing into bonds, including mortgage-backed securities which have driven interest rates lower.
As I write this, rates hit very close to the lowest level in history on Friday, February 28th. So, the big question is, what happens from here? Of course, nobody has a crystal ball, but it is likely that we will see rates stay low for next 6 to 12 months. That being said, expect some ups and downs along the way. For example, China announced today that they were close to having a vaccine that may be able to be deployed on a limited basis in April. Any news going forward that gives investors hope that this contagion is under control will drive interest rates higher. Expect the news to dominate from day-to-day and stocks and interest rates react accordingly. At some point if stocks continue to move lower there will be a point where investors feel confident that the valuations are just too good to pass up and start moving back into stocks. When that happens, you will see rates move up. There is no way to time the interest rate market, they move wildly from day-to-day just like stocks.
What’s The Good News?
In times like these, we can only hope to see the more positive side of things and try and look toward the future. Right now, the future is bright for those looking to purchase a home, as mortgage rates have hit an all-time low…a fact that could change at any moment. So, if you’ve been thinking about making a move, there is no better time than the present. Whether you’re purchasing your first home, sizing up, or sizing down, we’ve got the best home loan rates for you TODAY! So give us call at 678-483-3300 to find out how we can help make your mortgage loan process a successful one! Also, learn how to increase your chances of getting your offer accepted by getting pre-approved through our Certified Homebuyer Program. Click here to learn more —> www.perfectpreapproval.com
Until Next Time!
The FMT