I don’t know who pays attention to stocks but there is usually an inverse relationship between stocks and mortgage bonds. When stock are blowing away milestones like they are today, mortgage bonds take a hit. This occurs as investors seek yield, it is a constant flight to higher returns. The DOW had never hit 24,000 until today and it is blowing right by that, sitting firm at 24,250. Why are stocks up? Like it or not, a lot has to do with who took over the White House last November. Do not send me any political commentary. The Dow is up almost 23% year to date. The tax reform bill that is soon to be voted on in the Senate is gaining support (McCain just said he is on board) and the market seems to be pricing in a favorable expectation of passage.
What does this mean to our families we help? Rates are (have been) climbing. The price right now in loan decisions could easily be worse 25-30bps from price yesterday afternoon. In some cases that is an 1/8 increase to rate, it happens that quick. Don’t be caught with a Thanksgiving hangover, make sure you are giving the best advice possible to your borrowers today, and let them decide what is right for them.
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