LOW RATES ALERT!!! Many attribute the recent drop in rates to coronavirus fears, but how does a biological hazard relate to such an alarming rate drop?
China represents 21.95% of the world’s GDP, and this event deals a huge blow to their international commerce. As such, the global markets are currently in turmoil as many don’t want anything to do with China at the moment. As Chinese oil demands drop along with ongoing interruptions to international supply chains, the United States treasury acts as a safety net for investors to sell their global stocks and buy U.S treasury bonds. A result of this is the drop in the mortgage rates to 3.45% in early February, the lowest since August 2016.
If the virus continues to propagate, it could hurt a lot of businesses. Consumer confidence can plummet, resulting in banks refusing loans to fledgling businesses. On the flip side, this very low interest rate is great news for prospective homeowners. It’s widely predicted that until the media stops reporting on the virus, mortgage rates will continue to fall. There’s already been a surge in refinances; there has been a 183% increase in refinance applications this week compared to last. I highly suggest purchasing a house or refinancing for a new fixed rate soon and get what is truly one of the greatest deals in a long, long, time.
