Submitted by Shawn Headlee

Good Morning All,

 

What a great weekend!!  Weekends like that remind us of why we put up with the rain. 

 

The last three weeks have not been good for mortgage rates.  They have increased approximately .5% on a 30 year fixed mortgage.  This has been caused by positive news about the economy and the upward direction of the stock market.  When the stock market is dropping and the economy is weak, investors look for safe places to put their money and that place is typically the bond market.  When there is a flow of money into the bond market, the yields drop, which in turn drives the mortgage rates down.  When the stock market is going up, these same investors sell their bonds and buy stocks creating a reverse of the above.  Now this is simplified version of what affects our bond market, but it gives you a basic understanding of how mortgage rates are affected on a daily basis.

 

Hope that made sense and gave you an exciting subject for your next cocktail party!!  J