This Weeks Mortgage Update

This Weeks Mortgage Update "ACTIONS SPEAK LOUDER THAN WORDS." Despite the markets being closed last Monday for Labor Day, there was plenty of market action... and plenty of words from the Fed. So what happened, and what was said? Read on for details.
After the recent 4-month rally in the Bond markets, which has led to some of the best home loan rates in history, money has started shifting over to the Stock market. Why has this happened? Some economic reports have been better than expected in the past few weeks... such as the Jobs Report for August and Consumer Confidence. While that’s great news, it’s important to remember that good economic news - or as has happened recently, better than expected news - often causes investors to move their money out of the safe haven of Bonds to Stocks in the hopes of taking advantage of any gains.
So why does this behavior impact home loan rates? When the economy appears strong or starts to improve, and investors move their money from the safe haven of Bonds to Stocks, a decreased demand for Bonds means that Bond prices move lower. And when Bond prices move lower, it means that Bond yields - and consequently home loan rates - move higher.