The outlook for a great spring buying and even refinance season was very optimistic, beginning in early January. Mortgage Rates had dropped from the 6%’s to the high 5%’s, even getting close that elusive 5.5% in February for a 30 year fixed. Applications were up, buyers were active, sellers were selling their homes. Then, the Iran conflict began. A military operation or war on it’s own is not necessarily something that will cause mortgage rates to go up. However, when that even started to affect the price of oil, mortgage rates when up, and they went up quickly. Why? Because the price of oil causes the price of everything to go up, and when prices of goods are up, inflation becomes a problem. And rising inflation is the nemesis of mortgage interest rates.
However, maybe there is relief on the horizon. Iran and the USA have agreed to a ceasefire. If the ceasefire holds in the Middle East, rates should retreat as oil prices continue to drop. The price of crude oil, which peaked at $115.85 a barrel in late March and closed at nearly $110 a barrel yesterday, was down to around $90 a barrel today.
