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Financial markets are reacting to what economists call a Black Swan event.
A Black Swan event is a rare and unexpected shock that creates sudden uncertainty across markets. The phrase comes from the discovery of black swans in Australia, which challenged the long held belief that all swans were white.
Economists now use the term to describe rare events that disrupt financial markets.
Today markets are reacting to rising tension in the Middle East. When geopolitical conflict escalates, oil prices often move higher as traders worry about supply disruptions.
Oil affects many parts of the economy, including transportation, manufacturing, and shipping. When oil prices rise, investors often begin worrying about inflation. Rising inflation concerns can push mortgage rates higher in the short term.
But another important economic trend is developing. Recent jobs data suggests the labor market is slowing.
Mortgage rates are influenced largely by inflation and employment. When job growth slows, wage pressure tends to ease. When wage pressure cools, inflation pressure often cools as well. Over time that environment can support lower mortgage rates.
Right now markets are in what many call the uncertainty zone.
When uncertainty rises, many buyers pause and wait. But when some buyers pause, competition decreases. And when competition decreases, opportunity can appear for buyers who continue moving forward.
Many experienced buyers focus on securing the home price first. Mortgage rates can change later through refinancing, but once home prices rise, buyers can’t go back and purchase the same home at yesterday’s price.
Real estate is typically a long term investment. Short term market uncertainty doesn’t usually change the long term value of homeownership.
Sometimes the best opportunities appear when others are waiting on the sidelines.
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The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
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Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.
