How Mortgage Rates Change with the Bond Market
Filed under: Mortgage Rates
Do you understand the economic factors that affect mortgage rates? Many people want to know what is making the rates go up or down, especially if you are getting ready to buy a home.
Mortgage Bonds and Interest Rates are Connected
To put it in simple terms: mortgage bonds control interest rates. But what does that mean? When the stock market is doing well, then it’s common for money to rush out of bonds and into equities. Then, we usually see rates rise as the stock market is going up.
On the other hand, when the stock market goes down, then money usually rushes into bonds for safety. This is often the time when you have an opportunity to lock in a good interest rate.
Other Factors Affect Timing and Affordability
There are so many things that go into the calculations, and whether or not it makes sense for you to buy a home. While it’s ideal to lock in low interest rates, you also have to consider the equity that can be gained by buying sooner rather than later (even if interest rates are a little higher). Also, don’t be afraid to jump in even when interest rates aren’t ideal, because you can always refinance in the future when rates come back down again.
Our real estate team is here to help you evaluate your options and find the ideal timeline for your home purchase. We’ll discuss your needs, goals, and budget, then identify the optimal way to move forward.
Personalized Real Estate and Financing Recommendations
Whether you have questions about how interest rates will affect your payments or you would like more information about whether you can afford your dream home, I am always here to help. Contact me anytime; I would love to talk to you. Send me a text, email, or call at (951) 473-0390 or [email protected].