October, 2008 Stock Market Plunges but Mortgage Rates Go Up
The recent pummeling that the stock market has taken is disturbing in the least, and has hammered most everyone's investment portfolio. How low it will go has yet to be seen. However, with a downturn in the stock market, there is usually a silver lining- lower mortgage rates.
But we haven't seen lower mortgage rates when stocks take major downturns. Why is this?
To understand what's going on, first it's necessary to ...
Contrary to popular belief, when the Federal Reserve cuts short term interest rates, mortgage rates almost always go up. This doesn't seem to make sense, so as I sip my coffee this morning and digest the emergency 0.5% worldwide rate cut that happened early this morning, I thought it would be prudent to blog on this topic.
So why do rate cuts usually lead to higher mortgage rates? The reason is that rate cuts ...
