Mortgage rates have been dropping fiercely, so many rate shoppers assume they can?t go any lower.
The U.S. economy is in uncharted territory, the conditions of which could spell the lowest mortgage rates ever.
The spread between two key interest rates inverted Wednesday, August 14, 2019. Here?s why that seemingly insignificant phenomenon could lead to ultra-low mortgage rates, perhaps the lowest ever recorded.
In short, a yield curve inversion is a big deal because it?s awfully good at predicting oncoming recessions.
In fact, it?s accurately predicted the last seven of them.
And with recessions typically come very low interest rates.
In a normal world, a 10-year U.S. Treasury bond will pay investors more than the 2-year.
That makes sense. In exchange for holding your money longer, you get paid a bigger ?yield,? or interest rate, on that bond.
A yield curve inversion is when short-term bonds pay more than long term ones. In this case, the 2-year note pays more than the 10-year. This has happened prior to every recession in recent memory.
But, why would a short-term bond pay more? Well, markets believe that the government will soon intervene and bring long-term rates down via stimulus. No one wants to commit to a 10-year bond when things are so uncertain.
And this brief but significant inversion happened on August 14, and it could usher in a new era for mortgage rates.
Mortgage rates are lower now.
Markets often change without notice.
Lock in your loan while rates are this low.
BBB A+
Apply on line:http://visionquestlending.com/free_quote/
Sincerely,
Tony Nguyen | NMLS#93776
Vision Quest Lending | 2860 Michelle Drive, Suite 140, Irvine, CA 92606
Direct 714-464-8042 | 877-318-0992 x6502 | Fax 866-394-9352
Email | tony@vqlending.com
Website | www.visionquestlending.com
The U.S. economy is in uncharted territory, the conditions of which could spell the lowest mortgage rates ever.
The spread between two key interest rates inverted Wednesday, August 14, 2019. Here?s why that seemingly insignificant phenomenon could lead to ultra-low mortgage rates, perhaps the lowest ever recorded.
In short, a yield curve inversion is a big deal because it?s awfully good at predicting oncoming recessions.
In fact, it?s accurately predicted the last seven of them.
And with recessions typically come very low interest rates.
In a normal world, a 10-year U.S. Treasury bond will pay investors more than the 2-year.
That makes sense. In exchange for holding your money longer, you get paid a bigger ?yield,? or interest rate, on that bond.
A yield curve inversion is when short-term bonds pay more than long term ones. In this case, the 2-year note pays more than the 10-year. This has happened prior to every recession in recent memory.
But, why would a short-term bond pay more? Well, markets believe that the government will soon intervene and bring long-term rates down via stimulus. No one wants to commit to a 10-year bond when things are so uncertain.
And this brief but significant inversion happened on August 14, and it could usher in a new era for mortgage rates.
Mortgage rates are lower now.
Markets often change without notice.
Lock in your loan while rates are this low.
BBB A+
Apply on line:http://visionquestlending.com/free_quote/
Sincerely,
Tony Nguyen | NMLS#93776
Vision Quest Lending | 2860 Michelle Drive, Suite 140, Irvine, CA 92606
Direct 714-464-8042 | 877-318-0992 x6502 | Fax 866-394-9352
Email | tony@vqlending.com
Website | www.visionquestlending.com