CLARKONOMICS: Economic worries from around the world are causing mortgage rates to drop and having an impact on the price of gas.
The headlines in the financial press are ugly today. You have the Greece thing, of course. But there are also new concerns about Iran and their desire to incinerate the world. You see that all playing out in the volatility of the stock market and the temporary slowdown in what was the decreasing price of gas.
At the same time, unemployment is trending better. And interest rates are falling to unprecedented lows because investors have no place to go with their money. So they’re pouring it into ‘safe investments’ giving you the spin-off benefit of lower interest rates.
Mortgage rates for 30-year fixed loans are at 3.78%. That’s the fourth week in a row that the rate has gone down, with each week setting a new record low. Meanwhile, rates for 15-year loans are 3.04%. Both circumstances create incredible opportunity for would be investors, or if you’re looking to refinance or looking to buy a home.
On the auto loan front, I’m seeing the cheapest rates of my entire lifetime. And I’m not talking about the zero percent interest or the 0.9% or 1.9% stuff from the auto makers. I mean what many of the credit unions are doing. Navy Fed, one credit union that I’m a member of, is doing car loans starting at 1.79% right now for people with top drawer credit.
Here’s the reality: Times of uncertainty create opportunity. When others are afraid to tread, that’s when the greatest long-term money is to be made. For example, those who bought real estate at the depth of the housing meltdown will ultimately end up with the greatest profits down the road.