September 18th, 2019 12:34 PM by Steven Hofberg
Wow, lots of news over the past few days. And as we always
mention in our newsletters, much of that news does affect mortgage rates. As
you probably know, rates have gone down recently to a rather stable range in
the high 3s. But on Thursday and Friday we had several big shocks to the
market, and rates jumped up about a quarter of a percent. That’s a big jump!
What happened? Many financial analysts are pointing to two
events. First, optimism on future trade talks between the US and China, as both
countries delayed tariffs and gave indications of their interest in further
negotiations. That helps the stock market, but hurts the bond market. Second -
a really huge one - the attack on Saudi oilfields. The attack reduced their
production by half, which amounts to 5% of the world’s oil production. This one
has caused great uncertainty, to which markets always react badly. Oil prices
did spike up on Monday, but most think there is sufficient world supply at
least for now. That may change at any time.
The moral of this story is that you shouldn’t be complacent
about mortgage rates. They are historically volatile. Rates are still very good
right now, but there is lots of uncertainty in the market. So, if you are
looking to buy or refinance your existing mortgage but haven’t started the
process, give serious consideration to moving forward soon.