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This week, mortgage rates decline, and experts attribute this to anxiety over global events. The average 30-year fixed rate dropped 0.10 percent from the week before to 4.56, according to Freddie Mac.
“Growing political uncertainty in Italy and Spain led to a flight to safety, and renewed trade tensions between the U.S. and China compounded this trend,” says Aaron Terrazas, senior economist at Zillow. “Geopolitics are likely to continue driving major movements in financial markets over the next week, but markets will also keep an eye on incoming U.S. inflation and jobs data." The Washington Post reports that investors raced to buy up bonds and sell off stocks, driving yields down and prices up. Prior to this week, rates have been steadily rising, and this trend is expected to continue in the big picture over the next several months.
“Political and economic uncertainty stemming from turmoil in Europe and Italy prompted a safe haven run into bonds; mortgage rates were a beneficiary,” Jim Sahnger, mortgage planner at Schaffer Mortgage, said. “Time will tell if and when the Italy situation repeats the uncertainty seen from Greece a few years ago. More pressing, domestically, is the employment report due this Friday. I don’t expect anything hot to roil the markets, so we’ll likely stay range-bound to slightly higher for rates over the next week.”
