In recent months, mortgage rates have been on a roller-coaster ride with both inflation and a recession looming. It can be hard for homeowners to keep up with the fluctuations and understand what is driving the changes. This article explores the various factors that are influencing mortgage rates and how those factors are likely to shape the future of mortgage rates.
The article begins by noting that although one might expect mortgage rates to have increased with inflation, they have instead come down recently. It attributes this trend to various market forces, chiefly investor anxiety and political decision making. Investors have become increasingly nervous due to uncertainty in the stock market, leading them to move their money into bonds as a safe haven. This has created an influx of investors in the bond market, driving down the yields and, in turn, mortgage rates. Political decisions, such as trade wars, have also had an effect on investor behavior, leading to further decreases in mortgage rates.
The article also explores the potential consequences of a recession on mortgage rates. While a recession would mean lower rates, it would also likely hurt stock prices and could put investors into a risk-off mentality, which would drive up the demand for bonds. This, in turn, would drive down the yields and mortgage rates.
The article concludes by noting that it is hard to predict exactly what will happen to mortgage rates going forward. While inflation and a potential recession could affect the direction mortgage rates take, other factors such as investor behavior, political decisions, and inventory levels could also have a major impact.
For mortgage shoppers, it is important to stay up-to-date on the news and the mortgage market in order to make the most informed decision. The article provides insight into the current mortgage trends and the various possibilities that could affect the future of mortgage rates. By understanding all of the factors at play, homeowners can make the best decisions regarding their homes.
You can read this full article at: https://www.housingwire.com/articles/is-inflation-or-recession-driving-mortgage-rates-now/(subscription required)
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