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Mortgage Rate Update 1/11/21

Hello everybody. Sean Zalmanoff here with your Mortgage Rate Update for January 11th of 2021. We’ve got some different news today. For the first time in a while, we are not going to tell you that rates are at the best levels ever. Now, this doesn’t mean that rates have moved very much higher, we’ve sold off slightly in some of this has to do with what’s been going on in the stock market.

The stock market’s at record levels and so when we’re talking about it, of course, the indices are at record levels. Some stocks in particular are trading close to all time highs, but one really important thing that can affect mortgage rates, mortgage bonds specifically, again, which of course affect mortgage rates is that the value of stocks of what they’re trading at versus their future earnings is at record high levels. Now this doesn’t mean that a stock sell off is imminent, but if a pullback happens, bonds and in effect mortgage rates would be the beneficiary of that. There’s a lot of things that are fueling this record high stock momentum and movement right now though.

One way with rates being so inexpensive there’s very few places to put money. Not only are investors putting money in stocks because they can’t get a return in the bond market, a lot of dividends stocks, a lot of income yielding stocks are being invested in because they’re offering two, three, four percent dividends on what they returned. In addition to whatever appreciation there’s money, that’s paid out inside of those as well too. As you all know last week in the runoff election Democrats gained control, a very slim control it’s 50-50 in the Senate now, but with Democrats being in control of our president’s office, of the executive branch, as you all know from your history lessons the vice-president has the swing vote when it comes to ties in the Senate. If that was the case and things were partisan, oh my God like that would ever happen these days, that 50-50 tie would be broken and most likely go in favor of the Democrats with the 51st vote being that.

What does that mean? Well, there is a pretty big bipartisan support right now for $2,000 stimulus checks. There’s a lot of turmoil around that getting passed with the $600 checks, that I hope those of you that are eligible and needed it already have it in your pocket right now, I know there’s been some delays on those. But there is a very strong likelihood in the first few days of Joe Biden’s presidency that there’s going to be a $2,000 stimulus passed in the house. There is bipartisan support in the Senate as well too. For those individuals making less than $75,000 you are going to get a large chunk of money here very soon. That means that people are buying stocks. People are going to spend more money and that could in turn keep the upward pressure on the markets sustained, especially with low rates.

That is why, even though we’re trading on some of these record levels, they could continue to stay to be here for quite some time. As always though, you know how to connect with us, we are here for you. If you need any mortgage needs, remember, we’re like the walking yellow pages. Yellow pages does anybody even know what that is anymore, maybe if you’re at least 40 years old like I am you do, but anybody else, [Katie 00:04:03], you know what the walking yellow pages is?

Katie: I do.

You can’t see Katie, but she’s off to the side here. She helps me with these every week. If you need anybody, service providers, we’re here for you. As always, if you’re buying, you’re refinancing, anything, we’re your guys. Peace y’all. Have a great week.

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