Question
Stock Market and Mortage Interest Rates?
Is it true that when the stock market is doing well, the mortage interest rates will go up? The stock market was up this week (13,000). When I checked the interest rates at bankrate website, the rates were lower. But when I talked to the loan officer, she told me that the rates went up because the stock market went up.
2 years ago - 2 answers
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your loan officer did not do a good job in explaining to you what she was trying to say. first it doesn't always mean if the market is doing well rates will go up. that being said this is what often happens. there are lots of things traded on the markets what effects interest rates the most is the bond market. so... when the stock market is doing well people (investors) will take money out of the bond market (10 year treasury is what you should be watching) in order to invest in the stock market so when that happens the bond market has to increase the yield (rate of return on investment) to lure the investors back to the bond market. so... when they raise the rate that they are paying the investors rates go up to cover the higher yield. good luck
by jeff s
2 years ago
Asker's Rating: 
Other Answers
The two are not directly related. yet there are some ties but other factors come in to play. As a loan officer and all other real estate guru's acting as the high priest of the housing market, one only tool they have is confusion so the masses look to them as the answer people so they can practices there voodoo and charge you for there all knowing answers. I am worry as a last dicth effort of all these for closures many will suck dry there 401k and drop the market.
by Drew- 2 years ago