Wallapalooza! Look at these mortgage rates! How can this be? The soothsayers predicted 2014 rates in the 5’s or 6’s. They also predicted high gas prices, peace on Earth, and technological advances to prevent cataclysmic diseases.
Mayhem in the Middle East, the fear of recession in Europe, and the thought of traveling on any airplane to and from Dallas, brought fear into the tiny hearts of Wall Street traders. The bi-polar investors rushed to the safety of the US bond markets, therefore lowering our mortgage rates.
Oil Prices are down 20% this year and could plummet further. After 60 years we are officially less dependent on foreign oil and the U.S. is now pumping more oil than Saudi Arabia. The Chinese and German economies are showing signs of slowing down, therefore fewer cargo trucks and ships to guzzle gas. Don’t forget about the obnoxious little cars traveling the speed limit on the freeway require a fraction of the gas our monstrous SUV’s consume.
How low will rates go? The investors could decide to go back to stocks this week bringing the joy ride of interest rates back up. Potential homebuyers take note: Yawning at these rates could cost you a much higher house payment in the future. There will come a time when the soothsayers’ predictions will ring true.