Mortgage rates have been slowly falling over the last month and mortgage rates have hit new lows for 2014.
In fact mortgage rates currently are about at the same level as October of last year. This should help the housing market slowly recover from a slow first four months of the year.
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Concern about the housing market along with the overall health of the economy has investors very concerned on many levels.
The stock market has been on a tear upward over the last few months with new records being achieved. Some big invertors are pulling some money out of the stock market and placing it in the bond market which has sent the stock market falling this week. Money flowing into the bond market always lowers mortgage rates.
When mortgage rates decline due to economic uncertainty, more potential home buyers will not take action because of fear regarding employment. Although there has not been any signs of employment slowing presently, according to the labor department, corporate profits in this first quarter along with GDP and industrial production were far below expectations.
The signs of a possible slowing economy may ultimately lead to uncertainty in the labor markets which then keeps potential home buyers on the sidelines. (We have seen this before) I cannot predict the future regarding housing nor will I try. Anything can happen in the coming months and we need to hope that investor and employment uncertainty calm down so the markets do not continue to act in what appears to be a panic mode more than anything else.
My gut tells me this is just a temporary occurrence and things will stabilize in the coming weeks.
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Next week's market moving reports are:
Wednesday May 21st - MBA Applications, FOMC Minutes & Janet Yellen Speaks
Thursday May 22nd - First Time Jobless Claims & Existing Home Sales
Friday May 23rd - New Home Sales
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at 661-505-4300.