Flight to Safety Drives Down Interest Rates
“U.S. Markets Tumble as Fear Spreads”
—headline, Wall Street Journal (1/24/14)
It’s not great news for people who own stocks, but for prospective home Buyers about to lock on a mortgage, it’s terrific news.
Namely, the sudden aversion to stocks and all-things-risky has prompted a stampede into bonds, driving up their prices . . . and pushing interest rates down (bond prices and interest rates are a like a teeter-totter, moving inversely to one another).
So, interest rates on 30-year mortgages could very likely touch 4% in the coming days, down from around 4.5% just two weeks ago.
P.S.: My standard advice to Buyers is to consider a re-lock option whenever that costs less than $500 or so — what lenders call one-quarter point — for an average, $200k mortgage.
