Neuswanger: Impeachment uncertainties make rates volatile
The Mountain Mortgage Guy
Just when the Trump years seemed like they could not get any more volatile, things are going into the stratosphere (or depending on your view, the middle of the Great Pacific garbage patch).
The method of operation of Donald Trump seems to be deny, distort and, if all else fails, distract attention away from the issue at hand. As President, he has a lot of options when it comes down to creating distractions.
Mortgage rates are impacted by the bond markets and the bonds are often seen as a safe harbor during uncertain times. Trade wars, real wars and economic and social policies all impact the stability of the economy. If investors (and foreign governments) perceive the United States and the global economy as heading into uncertain times, they will turn to bonds for security.
If there is a massive influx of money into the U.S. bond markets then mortgage rates should remain at their current low levels and possibly drop. However, it’s important to note that mortgage rates can change several times a day — even one bad or good headline or tweet can cause a massive swing in the bonds within minutes.
In recent months, news of the on-again/off-again trade wars with China has sent stocks reeling, only to regain ground hours later when Trump tweets out his latest economic policy of the hour.
If the impeachment process seems to be moving against Trump’s interests, it’s a safe bet he will resort to trying to create an economic or political distraction of some sort that at least momentarily will shake up the markets.
Professionally I am advising my clients not to float their mortgage rates on new loan applications. Things might get slightly better but they could also get worse on a moment’s notice.
Chris Neuswanger is a mortgage loan originator with Macro Financial Group in Avon and May be reached at 970-748-0342. He welcomes mortgage-related inquiries from readers.