Where are Interest Rates Headed Now?

We saw a month’s worth of financial volatility in one night on Election Telling the futureDay. Now that the election is done and Donald Trump is President-elect, what is ahead for mortgage interest rates?

Since I don’t have a crystal ball to tell the future, let’s look at the principles and then see if we can come up with a conclusion.

Factors and Principles that Determine Interest Rates

  1. The election result was a surprise to investors. Investors don’t like surprises. This caused a rapid selling of bonds, which pushed interests higher by .125 percent overnight.
  2. Any rapid change in rates settles back down along with investors’ nerves. Remember what happened with Brexit?
  3. Uncertainty brings higher rates.
  4. Good economic news brings higher rates.
  5. Interest rates were trending upward anyway, irregardless of, and before, the election. Last year at this time, 30-year fixed rates were averaging 3.5%. Now they are closer to 4%.
  6. Sometimes the market just goes with the momentum — for awhile.
  7. Other factors, larger on the global economic stage, influence interest rates more than the U.S. election. Specifically, the European Central Bank Announcement coming next month (and the anticipation of it) is having a greater impact on interest rates than President-elect Donald Trump.
  8. The President does not set interest rates. The global economic condition sets interest rates.
  9. The market is anticipatory. Investors try to guess what will happen tomorrow and then react accordingly today.

Back to our headline question: Where are interest rates headed? I’m sorry I can’t tell you exactly what will happen, but your crystal ball is as good as mine. If you are nervous about rates going up, lock in your rate and be secure.

Thank you for stopping by my blog. Feel free to subscribe and to pass this info on via social media.

If I can help you with a  refinance or home loan, I am licensed in California and Washington, NMLS 1294134. Send me at email telling me what you need.

 

2 responses

  1. Hello I love the book it is very informative and helpful. I would like the names of certified credit repair specialist ,I will use them to help my credit situation.

    1. William, I sent you a private email with the information.

      Carolyn Warren

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: