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Mortgage Rate Update 07/27/2020

What’s up you all? So hey, we have got news and more mortgage rate news for you today. First of all, lets recap last week. By the way, I’m Sean Zalmanoff and I’m here to make your life easier and your rate shopping decisions of knowing when to lock more informed and better. So, we have been talking weekly about the initial jobless claims report which comes out every Thursday. Last Thursday it peaked a little bit higher than expected at 1.4 million. In normal times this is not a number to pay attention to but in times that we are in now, it is definitely worth noting. The higher the claims number, the more we are likely to see rates dip, so you know what that means for you.

Gold is approaching a record high right now and many economists think we are going to shoot through $2000. Now it’s important for many reasons. One, it’s an inflationary prediction, it’s a risk aversion asset when people are concerned about what’s going on in the market, they buy gold. When people are concerned interest rates may go up, they buy gold. It is a flight to quality and there has been nothing that has stood the test of time, even our great great great great great times 10 ancestors the way that gold has stood the test of time.

We do have some good news coming though our way. Moderna, today, this Monday just started injecting…that’s kind of weird to say, but 30,000 people with phase three of their vaccine. A couple things that are good about this, one if this vaccine comes to the market soon and the tests go well, they will get two treatments of this vaccine and that will be spread out differently according to how the testing is done. Obviously the quicker the vaccine comes to the market the better for our economy and Moderna is actually a really unique company that is using technology more than anybody else to sequence RNA in order to be able to bring vaccines to the market. If this works this could hold a lot of great things for us in the future in speeding vaccines to the market with scientific computers, AI, doing much of it for us.

And last but not least, something to be concerned about from a stock market perspective but I want to explain what it means and rates for you. So, the stock market has not been valued as high, and when people are talking about valued as high, we are discussing the price to earnings ratio. What a stock is trading at versus future earnings, so it is at the highest that it’s been in some sectors, since the .com era and we know that that didn’t end well for stocks. As we are seeing what is happening with the stimulus package that’s being haggled about in congress this week, and as we see what’s going on in the stock market so if the market continues to perform at the levels it is, there is a lot of concern. You know we don’t have a vaccine yet; we have jobless claims that are still high. That is probably going to make interest rates stay about where they are. Now, if the market does get a little bubbly and then sells off some, that would actually although not be good for our 401k’s and we don’t wish that on anybody, it would be good for interest rates and we would probably see interest rates move another leg lower.

We want to keep you abreast of all the pertinent information when it comes to your interest rate needs. I appreciate you, I’m Sean Zalmanoff and anything that we can do to help you, we are here for you. Have an awesome week!

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