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  4. Mortgage Rates Case Study – How News of the Swine Flu Lowered Mortgage Rates
This is an interesting example of how things work in the U.S financial markets. One unexpected thing leads to another and next thing you know, mortgage rates are lower.

That one unexpected thing that happened last weekend was the Swine Flu pandemic that is sweeping the globe. It’s not exactly something that one associates with anything positive. In fact, it’s downright scary. And it’s exactly that fear which indirectly caused mortgage rates to drop.

Mortgage Rates Drop as Stock Market Drops

It’s pretty simple economics actually. Investors are always looking for a safe place to invest and get a good return on their investment. Fear of the unknown makes stock investors weary. That weariness has caused the stock market to drop slightly, making bonds a safer place to invest. In turn, the bond markets have responded positively.

Fixed Mortgage Rates are Affected by Bond Markets

These same bond markets are what (in a very simple way) affect and set long-term fixed mortgage rates. In a nutshell, a good bond market means lower mortgage rates and that is exactly what happened over the past weekend.

Take Advantage of Lower Mortgage Rates While You Can

Once the swine flu scare has passed, and it will, the current (and quite unexpected) drop in mortgage rates may end. Don’t wait if you are thinking about buying a home or refinancing your current mortgage. Now is the time to act if you want a low mortgage rate and mortgage payment.

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