No one would say that the current turbulence in stock markets is a good thing, however this has given rise to a fresh wave of risk aversion that is undeniably benefiting home buyers and sellers right now.
This is the fifth straight week that we have seen falls in mortgage rates, which are now near to 3 year lows for a 30 year home loan (currently around 3.5% according to Zillow).
All the turmoil in markets has provoked investors to once more seek safe haven investments with minimal risks. This has made bonds an increasingly popular choice of late and seeing as increases in bond prices typically result in falling mortgage rates, we've been tracking a progressive decline in rates from around 4% at the start of 2016 to the current very low levels. Not even increasingly encouraging jobs data, with unemployment today reported to be at its lowest level in 8 years, has deterred the price of a home loan from heading south, when this very welcome trend would normally encourage rates to go higher (although it was a mixed week of economic news elsewhere).
It's a widely unanticipated development that simply cannot be ignored by anyone presently buying or selling, or considering it.
End of year predictions were generally suggesting a rise in mortgage rates to somewhere in the 4.5-4.65% region during 2016. These forecasts were, however, made before the collapse of the Chinese stock market almost as soon as this year opened for business. This has triggered reduced confidence in all markets and certainly casts some doubt on those predictions, though it must be said that there are still nearly 11 months to go.
We've been saying in our blogs for some time that delaying a home purchase or sale isn't a good idea and the latest developments only serve to fuel this strong assertion. While some might posit that rates may yet continue to fall, the uncertainties of our world dictate that a sudden rally in stocks or oil prices could see rate hikes.
Yet again its best to deal in the " here and now" and acknowledge that the current mortgage market provides stunning possibilities for buyers to lock in low, low rates and for sellers to ride on the crest of a wave of buyer sentiment that will continue to gain momentum for as long as the current circumstances prevail. Play a waiting game for even cheaper home loans may prove to be a very high risk and ultimately flawed strategy.
Get in touch with us today to capitalize on this amazing opportunity.