Trump policy and Global Unrest drive rates back into the 3’s
San Francisco homeowners, current and aspiring, have the administration’s ambitious policies and global conflict to thank for rates returning to under 4%. Buying and qualification power increased substantially as a result of investors clams that the “bloom is off the rose,” so to speak. Enthusiasm about the new administration seems to be tempering a bit, despite the fact that most of them align with the proposed ideas and policies that are being discussed. Ultimately, many are starting to feel that the mood in Washington and lack of harmony will prevent much of it from ever coming to fruition.
l had written about the reason for the immediate “pop” in rates after the election being due to the fact that Trump’s economy boosting measures that were never given and real attention or thought due to the campaign flow and media cycle, forcefully gave investors a moment to stop and think about what these proposals could do. When considering tax reform and a nationalization of of certain industries within the country, markets rallied to this all and caused rates to spike. Presently, you have these plans stalling out, including an infrastructure investment bill that is going nowhere fast. Couple all of that with international conflict and tension in Syria as well as North Korea, and you have a perfect storm for falling rates. Again, the best environment for rates is a slowing or soft economy and very low inflation.
In the Bay area, this is cause for a second look – if you put your house hunting or refinancing on hold recently. This is the first time since the election that people shopping for a mortgage in San Francisco and surrounding markets can lock in long term fixed rates in the 3’s. Analysts – who seem to never get this right – had been predicting rates in the mid or high 4’s for the rest of the year. Historically, any rate in the 4% range was considered too good to be true. Many San Francisco homeowners can attest to owning mortgages that averaged more than 8% over the last 40 years.
So long as there is uncertainty, here and aboard, as well as geo-political unrest – there will always be periods of soft rates or “dips” that present themselves. Right now is a perfect example of this and an even more perfect time to lock in a rate or discuss options. Email Me to explore some possibilities.