Interest ratesMartgage rateMisc 06/15/2023

How global uncertainty is Impacting Mortgage Rates?

If you’re thinking about buying or selling a home, you’ll want to keep a pulse on what’s happening with mortgage rates. Rates have been climbing in recent months, especially since January of this year. Global uncertainty can have a significant impact on mortgage rates. When there is a high level of uncertainty in the global economy, investors tend to seek safe-haven investments, such as government bonds and mortgage-backed securities. This increased demand for safe-haven assets leads to lower yields on these investments.

Mortgage rates are closely tied to the yields on mortgage-backed securities, which are bonds backed by pools of mortgages. As the yields on these securities decline, mortgage rates also tend to decrease. This is because lower yields on mortgage-backed securities allow lenders to offer lower interest rates on mortgages while still achieving their desired rate of return.

However, it’s important to note that other factors, such as domestic economic conditions, monetary policy decisions by central banks, and market competition, also influence mortgage rates. Global uncertainty is just one of many factors that can impact mortgage rates, and its effects can vary depending on the specific circumstances and the overall market conditions at any given time.