Mortgage rates dropped to another all-time low last week as concerns for global economic growth helped U.S. home buyers and refinancing households nationwide.
U.S. mortgage rates responded to non-U.S. events and, for rate shoppers and home buyers in San Ramon and Danville, home affordability improved.
Early in the week, with Greece and Spain debating new austerity measures, and with citizen protests rampant, a flight-to-quality helped to boost demand for U.S. mortgage bonds. So did rumors of a weakening Chinese economy.
“Flight-to-quality” is a trading term for when investors shun investment risk in favor of safer, more high-quality portfolio assets. Typically, this involves selling stocks and buying bonds, including mortgage-backed ones.
When demand for mortgage-backed bonds rise, mortgage rates tend to fall.
Demand for bonds is also receiving a boost from the Federal Reserve’s latest market stimulus program — QE3.
“QE3″ is a shorthand term for the Fed’s third qualitative easing, a program by which the nation’s central banker buys mortgage-backed securities on the open market in hopes of driving mortgage rates down... Read More