Looking to purchase or refinance a home? It’s important to know what moves mortgage rates. There are normally three major things that impact the direction:
- Economic News. Such as reports on the existing home supply, announcements by Federal Chairman Ben Bernanke. Existing-home sales in July plunged to the lowest level in 15 years, creating more concern that the housing market’s tenuous recovery is threatened by buyers’ shaky confidence in the economy.
- International News. (major events, pending legislation, war related news, etc). Volume often starts to pick back up after Labor Day when traders return from summer vacations. But Brian Peardon, a wealth adviser at Harrison Financial Group, said many investors might continue to stay out of the market even when they get back because of uncertainty about the global economy.
- Stock Market. (Money flows from equities (stocks) to bonds when it seeks shelter). The combination of the jobs report not posting as poorly as predicted, and light trading volume because of Labor Day, pushed rates higher by as much as a quarter-percent in some markets.
Mortgage rates are only based on one thing, Mortgage Backed Securities. The only way you have access to these is through live bond quotes. The stunning drop-off when mortgage rates are at historic lows indicates many potential buyers have lost confidence. Markets are in the midst of a 19-week rally and rates can’t fall ceaselessly . Mortgage bonds are likely overbought so when the selling begins, pricing should deteriorate quickly. This will cause mortgage rates to spike – quickly.
If you’ve been shopping for a mortgage or are just wondering if the time is right to refinance, call us and we will 
work the numbers together. Refinancing won’t make sense for everyone, but it may make sense for you. If you’re looking for specifically what mortgage rates are doing, contact us today at Academy Mortgage. There are so many factors involved in determining mortgages we’d be happy to help.
