Date: 2/29/2020
Mortgage rates have fallen to new lows as the carnage on Wall Street continues. Mortgage and refinance rates have plummeted in the past few weeks; a reaction to the effect of Wuhan coronavirus on worldwide markets. Concerns about the coronavirus caused a massive shift to less risky assets this week, while the economic data caused little reaction. As a result, the stock market posted enormous losses, and mortgage rates reached the lowest levels in years.
The reason that the coronavirus has been positive for mortgage rates is pretty straightforward. People have scaled back a wide range of activities such as going to work and traveling, which has slowed global economic activity and reduced the outlook for future inflation. Since no one knows how much more the disease will spread, it is still extremely difficult to forecast the extent of its economic impact. In response to the uncertainty, investors have continued to reduce the level of risk in their portfolios, which has been favorable for relatively safer assets such as mortgage-backed securities (MBS).
We?ll know more about mortgage rate movements in three weeks. That?s because the Federal Reserve?s FOMC is scheduled to meet March 17th and 18th to set a target level for the federal funds rate. Given an economic slowdown and lower interest rates worldwide, the Fed may elect to lower the target level of the federal funds rate. While this will not impact most mortgage rates directly, a Fed action can influence general rate trends.
But remember, the main force pushing mortgage rates down right now is the Wuhan coronavirus. Whether rates drop again ? or suddenly skyrocket ? hinges on news about the virus. That makes rate movements in the near future largely unpredictable. Perhaps they could nudge down a bit further. But it?s just as likely they could go up.
In all likelihood, this is a short, rare window of sub-3.5% rates that home buyers and refinancers will want to take advantage of. The spread of the Wuhan coronavirus has arisen at the very moment when some of the world?s largest economies are in recession or close to it ? including Germany, the UK, and Japan.
The emergence of the virus is a kind of financial piling on, bad news on top of bad news for worldwide economies.
And yet, in a strange turn of events, mortgage borrowers have benefitted greatly from the downturn in markets.
It?s an unlikely kind of silver lining under very poor circumstances.
Secure a rate almost unheard of in US mortgage history. Even if rates edge down a bit more, a mortgage rate on par with what we?ve seen this week puts you in a very good position.
BBB A+
Apply online:http://visionquestlending.com/free_quote/
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
Mortgage rates have fallen to new lows as the carnage on Wall Street continues. Mortgage and refinance rates have plummeted in the past few weeks; a reaction to the effect of Wuhan coronavirus on worldwide markets. Concerns about the coronavirus caused a massive shift to less risky assets this week, while the economic data caused little reaction. As a result, the stock market posted enormous losses, and mortgage rates reached the lowest levels in years.
The reason that the coronavirus has been positive for mortgage rates is pretty straightforward. People have scaled back a wide range of activities such as going to work and traveling, which has slowed global economic activity and reduced the outlook for future inflation. Since no one knows how much more the disease will spread, it is still extremely difficult to forecast the extent of its economic impact. In response to the uncertainty, investors have continued to reduce the level of risk in their portfolios, which has been favorable for relatively safer assets such as mortgage-backed securities (MBS).
We?ll know more about mortgage rate movements in three weeks. That?s because the Federal Reserve?s FOMC is scheduled to meet March 17th and 18th to set a target level for the federal funds rate. Given an economic slowdown and lower interest rates worldwide, the Fed may elect to lower the target level of the federal funds rate. While this will not impact most mortgage rates directly, a Fed action can influence general rate trends.
But remember, the main force pushing mortgage rates down right now is the Wuhan coronavirus. Whether rates drop again ? or suddenly skyrocket ? hinges on news about the virus. That makes rate movements in the near future largely unpredictable. Perhaps they could nudge down a bit further. But it?s just as likely they could go up.
In all likelihood, this is a short, rare window of sub-3.5% rates that home buyers and refinancers will want to take advantage of. The spread of the Wuhan coronavirus has arisen at the very moment when some of the world?s largest economies are in recession or close to it ? including Germany, the UK, and Japan.
The emergence of the virus is a kind of financial piling on, bad news on top of bad news for worldwide economies.
And yet, in a strange turn of events, mortgage borrowers have benefitted greatly from the downturn in markets.
It?s an unlikely kind of silver lining under very poor circumstances.
Secure a rate almost unheard of in US mortgage history. Even if rates edge down a bit more, a mortgage rate on par with what we?ve seen this week puts you in a very good position.
BBB A+
Apply online:http://visionquestlending.com/free_quote/
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