The unfortunate circumstances in Japan and in the Middle East have created uncertainty in the investment markets causing a “flight to safety” of bond investments. As illustrated in the figure below the bond market has returned to January highs thought to be history. When the bond market is up – the yield or rates decrease. As a result fixed mortgage loan rates have improved 0.250% to 0.375% since the first week in February.
This is an exceptional time to buy a home or refinance. Many missed out when interest rates moved up and this decline is not likely to last long. Once the situation begins to stabilize market trends will re-establish and rates will go back up.
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