Why are Mortgage Rates dropping? Rates historically seem to trend downward in uncertain economic times. Although Mortgage Rates move up or down for a variety of reasons, the Brexit debacle appears to be leading this downturn. As Europeans argue about “alliances” and “market trade”, Worldwide Investors tend to become nervous. During this uncertainty, the U.S. Bond market can be a safe investment vehicle to park capital while Brexit works itself out, which could take months or even years.
What is Brexit? Brexit is short for the “British Exit” from the European Union. This is a complicated negotiation which is slated to take place March 29th, however British Parliament has rejected efforts twice on how to implement it. What will happen March 29th? It remains uncertain, but the likelihood is that it will not be simple.
If you are a potential home buyer, what does this mean to you? With lower interest rates you have more buying power and a lower payment. So, it is a great time to buy!
Rates are down and it is likely with the continued confusion in Europe, more money will come into the U.S. Bond Market keeping rates low. Of course, there is always the possibility that something can happen elsewhere to drive mortgage rates up. But for now, if you are looking to buy or even refinance this is the time to strike.