Nashville mortgage interest rates fall during economic turmoil
The year 2016 has had a remarkably bad start with the world financial markets faltering and the Stock Market off to its worst start for any year ever. Some might think that Nashville’s real estate outlook would be as alarming as the rest of the economy’s.
Absolutely, there’s a lot to worry about. If world trade levels continue on a downward spiral, it’s hard to see how the U.S. economy wouldn’t fall apart as well – and that can be bad news for anyone trying to sell anything. For Nashville homeowners planning on selling this spring, seeing the stock market begin the year with a full-blown correction would normally be unsettling.
“The more insecure “securities” become, the more money tilts toward real assets: commodities, real estate, agricultural land and oil, precious metals.”
Yet, there are two external causes at work to neutralize such a reaction – and at least one of them has not been universally expected.
The first component is the conventional alliance between financial wealth (Wall Street’s stock in trade) and real goods (Nashville real estate is, if anything the definition of ‘real’). It’s a contrary relationship. Not always, but usually, the more insecure “securities” become, the more money tilts toward real assets: commodities, real estate, agricultural land and oil, precious metals. If for no other reason than the unified nervousness of the economic analysts, that should make owning property a more enticing place to invest your money. At least in theory.
The second factor was the generally unanticipated one. By last Friday, Mortgage News Daily’s Matthew Graham was writing about how investors were selling riskier assets “seeking safer haven” in mortgage backed bonds. The outcome was one that affected Nashville mortgage interest rates – one of the key drivers of affordability for Nashville homebuyers. “Mortgage rates surged lower,” Graham noted, “at the quickest pace of the year.”
Ever since the Federal Reserve’s decision to slowly begin raising interest rates after years of doing the opposite, nearly everyone had forecast a gradual rise in Nashville mortgage interest rates – one likely to continue well into the rest of 2016. Instead, by the end of last week, analysts were reporting mortgage rates approaching 7-month lows! It really was mind blowing: 7 months ago was long before the Fed raised that supposedly crucial Fed Funds rate. And now the analysts were raising speculation on when the next rate hike would happen…if at all…
It’s easy to think we can predict what will happen next, but as one distant mortgage branch manager after being quoted saying that the year has been “great for rates” so far, admitted “things could change quickly in markets like this.” That’s a possibility – but for the moment Nashville mortgage interest rates are a forceful component that makes buying or selling a more feasible plan than would have seemed to be the thought just a month ago – as well as excellent motivation to give my office a call!