No matter what your political beliefs, it’s important to understand how the economy is affected when potential scandals arise. In the mortgage industry, interest rates are directly affected when big political headlines hit the front pages of major media outlets. They can go up quickly amidst positive economic news. Likewise, they can go down rapidly when scandals happen.
Current Events Affecting the Economy
There’s no greater example of this than what has recently happened with the Trump administration. The controversies surrounding the firing of former FBI Director Comey and subsequent allegations that have followed have caught the attention of the House Oversight Committee. It looks as though an investigation is forthcoming and of course the I-word (impeachment) is being increasingly used.
So, how has this scandal affected the economy and mortgage interest rates? The answer is pretty simple. Wall Street reacted favorably early in the Trump presidency based on the fiscal policy legislation he was planning to enact quickly. Stocks went up and thus interest rates for lenders started to rise.
Lower Mortgage Interest Rates
However, these recent allegations have brought into question the administration’s ability to enact that legislation as quickly as originally hoped. In response, the stock market has taken a hit. This lead to lower interest rates—as much as a full eighth of a percentage point lower for most lenders and the lowest we’ve seen all year. The small day-to-day movements aren’t usually that significant. Improvements like these may only be seen a handful of times each year, which can be a good thing for mortgage borrowers while it lasts.
The question is how long will this dip in rates last? It’s not easy to say because the market is so volatile this year. We could see the interest rates go a bit lower or they could rise back up rapidly. If you have been on the fence about buying a home or refinancing your current mortgage loan, now is a good time to act and take advantage of the lower interest rates.
Lock In Your Best Rate
To learn more about current interest rates and recent rate trends, give me a call at (619) 929-0199. And, if you are ready to buy a home or refinance your mortgage, Transparent Mortgage is here to help you get the best possible rates and loan terms.