Mortgage Rates Catch a Break After Stock Market Rout

Posted To: Mortgage Rate Watch

Mortgage rates caught a break today, moving back near last Thursday’s levels as bonds (which underlie rates) benefited from today’s extreme market volatility. It’s a common misconception that interest rates and stocks always follow each other. While this is often true over shorter time horizons, the opposite tends to be true in the long run. Moreover, there are numerous examples of shorter-term moves that also suggest the opposite. As recently as last week, higher rates were being blamed for stock market weakness, but today’s sharp drop in rates did nothing to soothe the significantly sharper drop in stocks. The fact is that stocks have rallied to very high levels. They’ve been rallying for a very long time, and there’s been very little volatility recently. The longer that continued to be the…(read more)

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