Information Source: Bank of America, May 14 2014
Last week, mortgage bonds hit their highest levels in 2014, helping home loan rates reach some of their lowest levels this year.
One of the main reasons bonds and home loan rates have benefitted of late is due to safe haven trades, meaning that when there is uncertainty in the world, like the current situation in Ukraine, investors often move their money out of stocks and into less risky assets like bonds.
This includes mortgage bonds, the type of bond on which home loan rates are based. As tensions have escalated overseas in recent weeks, our bond markets have improved—and as mortgage bonds improve, so do home loan rates.