The Headline was pretty somber
China is raising tariffs on $60 billion of US goods starting June 1. The markets are selling off. As of 9:27am, the futures are down over 500 and the stock markets are set to slide again for the second week in a row.
Mortgage Rates thrive when bad things happen
That's right... mortgage rates get better when things are going poorly in the economy. But what is really happening. It all comes down to the growth of the economy. With tariffs come a one-time extra cost on US goods which cascades into other problems that go along with it. The end result, lower economic growth. When there are signs of lower economic growth (wholly speaking) then investors pull their money out of stocks and into something more solid... Bonds or Cash. When the stock market sinks, so do interest rates.
How long will it go on for?
Who knows... that depends on our President. One thing I think all of us would agree, he's pretty stubborn and a business man. I guess he feels that he can squeeze the Chinese harder than they can squeeze us until they give in. This is true in any hostile negotiation right? Ask anyone in the military and they will tell you... if your guns are bigger than theirs, you should win. But, do we have the property strategy and is it worth the cost?
One thing is for sure, as tensions increase and no deal is struck... while the two Presidents fight over the future stake of our economies, watch interest rates plummet.
My two cents
If you are buying a home, negotiate in earnest. You can see great numbers on my EMA Purchase Calculator here.
If you bought a home recently or were thinking of refinancing... do it now. You may have a smaller window than you think. If you want a quick worksheet on what refinancing would look like to you, check out my EMA Refinance Calculator.