Higher Interest Rates?

Real Estate

Higher Interest Rates?

Mortgage rates have risen since the election of Donald Trump, from 3.5% to the recent 4.2%. Bond investors are perceiving an economic stimulus package to uplift the economy. More business activity, greater commerce, and faster job growth are certainly good news, which thereby also no longer justifies the ultra-low interest rate environment of the past decade. Some Wall Street players could be betting up the bond yields not because of stimulus but for negative factors of a much higher government budget deficit arising out of big tax cuts and increased government spending. Whether from good improved economic prospects or bad budget deficit projections, the rates have gone up and will likely continue to do so over the next two years, spanning the period when the impacts of the stimulus will have been fully felt.

May 29, 2016 Market Trend