As IB’R pointed out earlier this week, the bond market and the stock market are at odds over where the economy is headed. Bond rates are dropping; a sign of pessimism, while the stock market’s surging; buyers expect the economy to keep improving.
Only one group can be right but while waiting to see who is, the Wall Street Journal reports that mortgage rates have followed bonds down and 5% loans are available again. “The difference between 5 1/2% and 5%,” the article quotes one mortgage expert, “is shopping around.” I have no insight on whether the economy is truly on the mend or, rather, my guess is based on conservative fiscal thinking and could be wrong as likely as being correct, but a 5% fixed mortgage sounds attractive enough that would-be buyers hesitating on buying now might want to consider it. If they find a good value on a house, that is.