Even though the Federal Reserve increased the Fed Funds Rate by a 1/4% a month ago, the interest rates have dropped 3/8% over the past two weeks. The attached chart of the 10 year note shows how the rates have dropped and broke through numerous support levels.
The international stock markets have dropped substantially over the past two weeks. As a result the money coming out of the stock market has been parked in bonds and mortgage backed securities. The United States bond market is seen as a safe haven for the international currencies when things aren’t going so well. The result is a correlating drop in the interest rates.
As I’ve conveyed many times in the past, regardless on how the Federal Reserve tries to manipulate the interest rates, geo political events, and international currency flows will win the battle.
It’s hard to tell at this point if the stock markets are just making a short term adjustment, or if this is the beginning of a bear market. Regardless, anybody that needs to refinance should take advantage of what may be a short term reprieve of the long awaited increase in the interest rates.
If you are in the Los Angeles region, have any questions or real estate sales or financing needs, feel free in contacting:
Ron Henderson GRI, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc
Gov’t Affairs Chair – California Association of Mortgage Professionals
www.mres.com
ronh@mres.com
Real Estate market, Mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley