Stock market drop provides refinancing opportunity

The month of June has brought on one of the largest drops in the stock market in the past fifty years. The stock market has dropped by over 10% as investors are fearing a catastrophic slow down to the economy. The main reason behind the huge drop has been the rapid rise in oil prices that are looking to end the month of June approaching $145 per barrel.

The only good news to come out of this huge decline in the stock market is that mortgage interest rates have started to retreat as well. Earlier in the month mortgage rates looked certain to be heading towards 7% as the yield on the ten year bond approached 4.3%. Over the course of two weeks, mortgage rates jumped up by almost 1/2 of a percent and the ten year bond topped out at 4.26%. Since this point the bond market has regrouped as investors have fled out of the equity positions looking for more stable investments, despite the threat of inflation.

Fixed rate long term mortgage were heading back towards six percent as the market heads into the month of July. This is good news for homeowners who have yet to refinance and are looking to fix in their interest rates. The drop in interest rates will also be welcome news for home buyers who are capitalizing on a great home buying market. Keep an eye on the stock market and ten year bond as a leading indicator of where refinance rates are heading as this remains an extremely volatile market.