Mortgage rates continue to drop as bears take over Wall Street

Wall Street bull and bearIf you’ve been following the stock market this year, you would have noticed that the DOW has been down triple digit numbers all but one day since the year began. That is not good news for investors, but it has produced good news for home owners and buyers.

The yield on 30 year treasury bonds dropped to all-time lows this morning, while the yield on 10 year treasury bonds have reached lows not seen since May 2013. Lenders I work with tell me that as of this morning, best mortgage rates are firmly below 4% for the best qualified buyers, and even for those with less than 20% down payments.

Why all the panic on Wall Street?
It’s earnings season again, and in addition to the oil and natural gas commodities dropping to lows no one could have predicted, retail stores are reporting much lower than expected sales for December 2014. Everyone expected December to be a great month for retailers. Consumer confidence was up, low fuel prices added more cash in consumers’ pockets, the unemployment numbers were down, but consumers still didn’t spend as expected.

According to pundits on CNBC, this could be a very rocky year on Wall Street. Even some of the big banks are reporting lower than expected earnings  (which was unexpected.) And, of course, we can’t discount all the turmoil around the world.

Going forward, everyone is watching the housing markets to see how property valuations hold up as the year progresses. In the meantime, at least here in Portland, the housing market is off to a strong start as buyers are anxious to lock in the very low mortgage rates.

Reuters pundits are now predicting that the Feds will very likely hold off on any interest rate increases until 2016.

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