RALEIGH – Homeowners are constantly getting a lot of refinance-your-mortgage offers, but they might want to pay more attention to the deals now thanks in part to the ongoing economic turmoil.
Interest rates have dropped to under 4 percent – and could be getting even lower, says N.C. State economist Dr. Mike Walden.
“Yes, mortgage rates should trend lower,” says Walden when asked about the impact of declining prices for government bonds amidst the trade war and currency dispute with China.
CNBC reported Wednesday that refinancings in the US have jumped 12 percent recently.
Bankrate.com reports that 30-year loans were down to 3.87 percent as of Wednesday. That’s down from a high of 4.27 percent on May 27.
And the Federal reserve, which recently cut rates for the first time in years, is under pressure to reduce rates even lower by President Trump among others, including many investors on Wall Street.
Walden sees more cuts coming.
“Yes, I’m now thinking the Fed will cut more, and I think the markets think this also,” Walden explains.
“So if the Fed doesn’t cut more, there will be an adverse reaction on Wall Street.”
Trade troubles aren’t limited to China and the US, Walden adds.
“Brexit is another negative for the world economy. But Europe’s economy is already treading water, so I don’t think there’s much downside for the US. Indeed, there may be some upside if the EU – and UK – are more willing to do trade agreements with the US. Apparently, there is already a new agreement from the EU purchasing more US beef.”