Rate Update October 6, 2008
Finally….rates have shown meaningful improvement this morning.
If you’ve followed ‘rate update’ over the past couple weeks you know that we have felt that rates would trend lower on credit and recession fears. Indeed that is the case this morning and rates have moved lower.
Why are rates moving lower today?
Around the world investors are concerned that the ongoing credit crisis will cause the global economy to enter into a recession. The problems stemming from the US credit crunch have been exported overseas. In fact, Germany announced over the weekend that the government had orchestrated an effective bailout of one of the nation’s largest lenders. When stocks perform poorly it’s common to see mortgage rates drop.
Also helping mortgage rates this morning is a drop in oil prices. Oil prices have now hit an 8-week low at $90 a barrel which is a drop of 40% since peaking in July. A drop in oil prices eases inflationary pressure which benefits long-term mortgage rates.
Current Outlook: floating