Home loan rates fall after latest moves by China
Homeowners, take note! Home loan rates dropped sharply this morning after the Chinese government announced a series of protectionist trade policies in retaliation for the Trump Administration’s tariffs on almost $300 billion of Chinese goods. Home loan rates are now well below 4.00%, making now the perfect time to refinance or buy a new home.
Not surprisingly, stock market indices declined immediately on the news from China as investors flocked to the relative safe haven of U.S. Treasury bonds. At one point on Monday morning, the yield on the bellwether 10-year Treasury bond dropped below 1.75%, its lowest level in almost three years. What does that mean for homeowners? It means that conditions for refinancing are ideal. Even if you refinanced your home loan last year, you could benefit from today’s lower home loan rates.
Homeowners should keep in mind that the escalating trade war between China and the United States is rapidly developing and the situation could change at any minute. As a result, waiting to refinance could cost you real money. Home loan rates are already lower than they were before Trump was inaugurated so now is not the time to procrastinate.
As we’ve reported over the past few weeks, the United States and China have taken turns hiking tariffs on each other’s export products and as a result, the world’s financial markets have been very unstable. At the same time, the Trump Administration had been pressuring the Federal Reserve to cut its interest rates in order to stimulate the economy and avert a recession. Last week, the Federal Reserve did precisely that, cutting its interest rates for the first time since 2008. However, after today’s news, the Trump Administration is renewing their call for the Federal Reserve to cut interest rates even further. Stay tuned.
The new trade policies announced by China go well beyond just higher tariffs. The Chinese government threatened to suspend imports of all U.S. agricultural products indefinitely and also took steps to manipulate the value of the Chinese yuan in order to offset the impact of higher U.S. tariffs. There’s no telling how the Trump Administration will respond.
Meanwhile, in the relatively peaceful world of the housing market, many homeowners and home buyers have been oblivious to the fact that home loan rates are actually falling. Don’t be caught on the sidelines! With property values rising in most parts of the country, now is a great time to apply for a Nutter Cash Back Refinance, especially if you’d like to use some of your equity to pay for home renovations or to consolidate high interest debts such as credit cards.
Similarly, if you’ve been thinking about buying a house but aren’t sure if it’s the right time, think again. Housing inventories are starting to climb in many parts of the country which is giving many buyers more options to consider. Now is a great time to jump into the market and get a great low fixed rate on your home loan.
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