2016 should prove to be a good environment for mortgage rates.
With the Feds’ first interest increase behind us, mortgage rates really have not moved much.
The stock market, which has had its worst start in years, is keeping rates low. Usually when stocks suffer rates benefit from that. It’s like an hourglass. When you turn it over, the sand moves from the top to the bottom. The same goes for investment money. It usually flows from stocks to bonds or from bonds to stocks.
Weakness in the China market, lower oil prices and a stagnate economy in Europe also have kept rates down. So has low inflation and wage inflation. Historically home prices rise in tangent with wages. Wage inflation has been absent for quite some time.
Low mortgage rates are fueling the market for purchases and refinancing. Year-to-date mortgage application for new and existing homes has been acceptable, which is really bucking the trend given the weakness in economies abroad and lower oil prices.
The Fed’s future interest hikes will be very data dependent. Moving to0 soon could slow our economy and push us into the brink of recession.
To contact me, call 773-557-1000 ext. 15, e-mail email@example.com or visit http://www.ronmortgage.com.