“The government shutdown is now the longest running shutdown in our history. Over 800,000 federal workers remain without a paycheck. Meanwhile, the government is accruing back wages to the tune of $2,000 per second.”
Counterintuitively, this situation has helped to create a silver lining for home buyers.
Mortgage interest rates are now lower than they were in November and December, so it is a good time to buy if you have the patience for a potentially longer loan approval process.
The government shutdown has helped contribute to lower mortgage rates. How?
First off, political uncertainty encourages investors to be less risky with investments. Mortgage back securities are traditionally viewed as much safer than the stock market. This current shift in investment to mortgage-backed securities drives down their yields creating downward pressure on interest rates.
Secondly, lower government spending has a slowing effect on the economy which is bad for the stock market. As we know the US stock market has traded lower for the past two months which also helps interest rates improve.
There is no way of knowing how long this will last.
Given the complex nature of the situation, we urge you to connect with a knowledgeable lender if you are considering buying or refinancing. We have great business partners that can field questions about current or projected mortgage rates.
WE WOULD LOVE TO BE OF SERVICE, SO PLEASE CONTACT CAREY OR KATE FOR ANY INFO ON BUYING OR SELLING YOUR HOME!
Information thanks to Evan Swanson of Swanson Home Loans