The Economy Forcing Mortgage Rates Down

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The mortgage rates in the United States continue to fall despite the predictions that they will increase by over 1% by the end of 2014 or the first quarter of 2015. Even though the policy of the Federal Reserve works to stimulate the upward movement of the interest rates on home loans, the current economic events have the exact opposite effect. At present, this effect is stronger and pushes the rates downwards to ever lower levels.

Right now, the interest rate on a 30-year fixed mortgage is 4.20%. It is 0.05% lower than the previous week. In fact, it hit its lowest point in the past 5 weeks. This decrease is a direct result from the performance of the US economy and the current international events affecting the financial markets.

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The announcement of the Bureau of Labor Statistics that 192,000 new jobs were created in March 2014 created concerns that the growth in the US economy is experiencing a slowdown. The number of new jobs created fell short of the expectations of experts who predicted that there will be 13,000 more new jobs during this month. This resulted into an upward movement of the mortgage bond prices. The higher prices worked to bring mortgage rates down.

The demand for US mortgage bonds is growing even though there is a slowdown in the local housing and home loan markets. This puts an upward pressure on their price and a downward pressure on the interest rates. The growing demand for these bonds is a direct result of the uncertainty in the global economy due to the events in Eastern Europe. The slowdown of the Chinese economy plays its role as well.

The downward pressure on the mortgage rates can remain for quite some time, but dramatic decreases are not expected. It is more likely for the rates to start moving up at a slow pace.

Mailynne

Mailynne

Mailynne serves as a content strategist and writer for mortgage.info. She is ahighly task-oriented strategic planner and experienced writer. Over the past 10 years, Mailynne has managedcontent for both large corporations, non-profits and businesses. She specializes in managing digital marketing,branding and web development content. Mailynne has worked with a variety of local, national and international organizations.

Contact: mailynne@mortgage.info
Mailynne

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