Mortgage Market, Stock Market, Unstable… Oh my!

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After the House of Representatives defeated the ‘Emergency Economic Stabilization Bill of 2008′ affectionately known as the$700B Bailout… the stock market fell more in any single day in history.  [You probably have already recognized that the stock market does not favor uncertainty. =0)

The Dow Jones Industrial Average closed down 777.68 points, its largest one-day point loss ever.

Apparently, I am not the only one that remains bullish on America as a whole though, because only 24 hours later... we had the third largest GAIN ever.  I feel like the kid that gets a free pass to stay on the roller coaster over and over and over... only i am starting to feel like I may hurl if I don't get off soon.  That Chili Blog...uh Dog... and the funnel cake isn't resting well anymore! LOL

Does this mean, at the end of the day, the experts really don't know that much  more than you and me?  Makes one think, does it not?

The stock market activity is highly relevant to mortgage rates right now because when investors flee the stock market, they're often parking their money in bonds.

In general, that causes mortgage rates to fall.

But, as in many things, when folks regain their appetite for funnel cake [read: stocks], as they did Tuesday, they move back into the market, “un-parking” their bond money. This causes mortgage rates to rise… we have talked about this before referring to it as the “Flight to Quality”.

Both Monday’s and Tuesday’s drastic swings points to the speed at which market conditions can change, taking mortgage rates with them. At the end of the day, what does this mean for you… if you find a rate for a home purchase that you like, you may be best served by locking it in.  If  not you may find your hovering over the garbage can near the tilt-a-whirl. =0)

We can’t predict if rates will fall or rise going as we move into the future, but if the stock market is any sort of a clue lately, in whichever direction rates go, they’re going to go there like an amusement park roller-coaster.  [Personally, if I had to choose, I like the Hulk at Universal.]