The interest rates have fallen to the lowest in over a year, but the economy indicators suggest the rates should be going up. Why is this?
There are 2 basic reason that are keeping the Mortgage Interest rates Low right now.
1. Fear Abroad
Even though the economic situation oversees has the lowest effect on our interest rates there are just so many things going on overseas that it is having a much larger than normal affect on rates. England is trying to exit the European Union, Greece is struggling to pay the government employees and the European Union’s general economy is not growing at a pace that has any investors feeling it is in a good place. There is also the Trade Tariff discussion between the U.S. and China and the outcome of this is just not very clear. So with all of the uncertainty going on overseas investors that normally invest there are taking this money and putting it into a safer place which is mortgage backed securities. This is artificially driving the interest rates down.
2. The Current Political Situation
With the Positions of the President, the Republicans and the Democrats right now being so far apart and deeply entrenched in their decision the government is at a stalemate. This increases fear and uncertainty for U.S. investors and they are moving their investment capital to a safer place which is mortgage backed securities. This is also driving the interest rates artificially down.
What this means to the everyday home buyer and home owner is that we are experiencing unexpected low interest rates that will not stay this low for very long. Once the current administration begins to settle on some issues and the government opens back up the investors will move their monies from the mortgage rates and back into the economy driving rates up quickly.
I hope this helps bring a little understanding to the current situation.
If you would like to see where the rates are in your particular situation please go to www.LoansFromTroy.com and apply or inquire about the current rates and one of our professionals will reach out to you and go over your current position in detail.