Because of Europe's struggles, the world's money was looking for a safe home. That safe home was in U.S. Treasury bonds. The heavy purchasing of these bonds caused Treasury yields to fall. In turn, mortgage rates benefitted as well.
Livonia, Mich. (Vocus) May 12, 2010
A drop in the financial markets doesn’t always have to mean bad news. Mortgage consumers got a pleasant surprise last week when mortgage rates took a drop downward.
Quicken Loans Chief Economist Bob Walters explains the reason for the fall is a need for security for investments in today’s market.
“Because of Europe’s struggles, the world’s money was looking for a safe home. That safe home was in U.S. Treasury bonds. The heavy purchasing of these bonds caused Treasury yields to fall. In turn, mortgage rates benefitted as well.”
Last week, the 30-year fixed-rate mortgage fell to 4.99 percent. Despite the uncertain financial market, the mortgage industry is in the midst of a strong rate environment especially if you are looking to complete a mortgage refinance. However, many experts are warning against procrastination, as rates have been extremely volatile recently and there is no assurance these rates will last.
Very few financial professionals doubt higher rates are on the horizon. Large drops in mortgage rates, like we saw last week, are not common.
The bottom line is that anyone who may be waiting for mortgage rates to return to their lows of earlier this year might benefit from contacting a mortgage professional and locking in the current rates. The opportunity may not last much longer.
For more information on mortgage rates or to speak with a mortgage banker, visit http://www.quickenloans.com