Economic Weakness Can Lead to Lower Mortgage
Rates
So you've been careful with your money all these years and
have always put some aside for a rainy day? Good for
you! Even when the economy is weak, those who plan ahead
can benefit from its downturn by taking advantage of market
conditions. Even mortgages can benefit during tough
economic times as rates tend to drop when weak economic data
is reported. How can you as a savvy consumer benefit
from this? It's as simple as following the
numbers!
Weak economic data usually means that consumers are pulling
back on spending and are concerned about their jobs and other
financial matters. As a result, the mortgage market
usually sees a drop in demand for mortgages and a drop in the
interest rate charged for mortgages. Those who have put
off buying a house for some time and have stellar credit may
find that during these economic downturns they can get more
house for less money and a great rate to go along with it!
As always, it pays to keep on top of mortgage rates which
often change week to week. If you are thinking of taking
on a new mortgage one item that you should pay attention to
that could potentially raise the rate is inflationary
data. When the market sees data that shows inflation are
going up, mortgage rates tend to rise as well. After
all, the value of a dollar becomes less as inflation is
factored in. If you are thinking about buying a
house you could potentially save yourself as much as half a
percentage point just by knowing when the Fed releases
inflationary data and locking in your rate before that if you
think the data will show inflation is on the rise.
Just like in the stock market, for the real estate investor
out there - or even those looking to buy a new home - the best
time to buy is when the market is down. The house that
may have been outside your price range could suddenly be
reduced tens of thousands of dollars. Combine that with
an interest rate that is half a point to a point lower than
what you were expecting and soon you find that a house that
you thought would be a struggle to afford is a comfortable
financial fit!
The economy rises and falls, but over time it all evens out
and most everything - including housing - stabilizes. By
planning your real estate purchase and keeping your credit in
shape you can set yourself up to take advantage of the
economic downturns and come out of it in better shape
financially than you thought possible!
It's a buyer's market out there - take advantage of
it!
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