Greece’s decision to reject the set of reforms imposed by the Eurozone creditors may have been a bold one, but it’s causing ripples in the global economy and greatly influencing the American mortgage industry. Since events in Europe unfolded last week, the mortgage rates moved even lower.
The current Eurozone crisis is leaving potential investors with little confidence. In the midst of so much uncertainty though, the purchase of safe haven assets such as bonds is deeply encouraged and promoted. As such, the mortgage backed securities and treasuries in the United States were met with an excess of demand this week. The higher the demand, the lower the rates and the higher the bond prices.
Greece’s decision to say no to the Eurozone’s offer caused bonds and stocks around the world to go higher and lower respectively. It is a problem that’s clearly affecting the global economy and there’s also no hope that Greece’s situation will ever be met with a resolution in the near future. Therefore, those who are planning on taking out a loan are advised to hold off until later, since it’s only a matter of time until lenders re-price for the better.
The global financial markets are traversing a very uncertain path. There are also a lot of questions whether the global economy is going up or down, but one thing is clear: 2015 is definitely a more volatile year than 2014. 2015 began with a very bold move to the lowest possible rates since May 2013. What made this possible was the introduction of EQE and Europe as a whole.
In conclusion, in April, thanks to the European Quantitative Easing, global rates were pushed down to an all-time low. While that was good news for many people who took out a mortgage back then, there is still a risk that rates are going to increase by the end of the year.
Today’s Best-Execution Rates
- 2.75 percent to 3.25 percent for 5 year ARMS.
- 3.25 percent to 3.375 percent for a 15 year fixed loan.
- 3.75 percent to 4 percent for VA/FHA loans.
- 4 percent to 4.125 percent for a 30 year fixed loan.
