What a wild ride! - mortgage rates continue to tumble.
Given that there were widespread expert predictions at the end of 2015 that rates would progressively climb to somewhere between 4.5% and 4.65% during this year, the contrasting story of mortgage rates so far in 2016 is already remarkable by any standards. This week saw yet another very notable milestone reached. In our Tuesday blog we mentioned a CNBC article that suggested that even lower rates might be on the way. By yesterday Reuters was reporting that the 30 year rate was now at its lowest in nearly three years!
What an amazing turn of events.
Of course the question that will be on the minds of many right now is will rates fall even further?, as was hinted at in the CNBC article. The wiser strategy, however, is to take the position that as rates are so incredibly favorable right now, why risk some unexpected change in market dynamics that could see them rising again. Locking in a low rate right now is just a fantastic, arguably unmissable, opportunity.
Indeed, if there's one thing the story of home loan rates so far this year should be teaching us, it's to expect the unexpected.
There's simply more pessimism around at the moment about the state of the global economy. As we've been seeing for some time now, international affairs are having a very direct effect on overall investor confidence, with the result of a continuing retreat into safe haven investments, such as mortgage backed securities (MBS), which is the biggest contributor to keeping rates so low.
The added uncertainties of an election year also eat away at confidence, with the result that rates seem to be pinned at a far lower and more attractive percentage point than anyone dared to anticipate.
What would be a huge mistake, however, is to assume that the situation is permanent and cannot change. Remember that just as highly informed experts didn't see low rates in their late-2015 crystal ball gazing, there's no guarantee of something suddenly changing on the world financial scene to shake things up, just as happened with the Chinese Stock Market crash in early January.
Ever since the climb out of recession began, the world has never been a very predictable place. Therefore the best policy has to be to take advantage of what is, by any standards, an incredible opportunity to upgrade your home, refinance it or get on the first rung of the home ownership ladder.
Whatever your situation, we can help to ensure that you make the most of the current scenario. Call us today to get things started.