NYSE Outage, Greece, & China Drop Mortgage Rates To New Lows

July 8, 2015 - 3 min read

Mortgage Rates Sink Again

Another day, another low for . And, this time, it’s a global team effort.

In Greece, leadership presented a plan to remain in the Eurozone that was met without enthusiasm. In China, stock markets lost big again despite government-placed market controls.

And, in the U.S. a rash of technical “glitches” left United Airlines, The Wall Street Journal, and the NYSE unable to conduct business. The NYSE issued a halt to trades at 11:30 AM ET.

Through it all, though, the U.S. mortgage-backed securities (MBS) market has remained a safe haven for investors, attracting dollars and pushing up prices.

When MBS prices rise, mortgage rates drop. There are more chances for today’s homeowners to , and for first-time and repeat buyers to buy their next home cheaply.

Mortgage rates are now below 4 percent and headed toward their best levels of all-time.

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Jobs & Greece Move U.S. Mortgage Rates Lower

U.S. mortgage rates are down for the fourth straight day with little news to reverse the slide.

The current streak began last week. On Thursday, the Bureau of Labor Statistics released the June Non-Farm Payrolls report which showed weaker-than-expected job growth last month, plus large downward revisions to the number of net new jobs created in April and May.

Wage growth was weak as well. Because weak job growth may indicate a slowing U.S. economy, investors poured into the relative safety of the bond market.

Mortgage rates improved sharply that day.

Then, during the weekend, the citizens of Greece voted to reject the austerity measures which would have granted the nation-state the bailout funds needed to stay afloat.

Without the funds, Greece will almost certainly default on its next loan repayment, due at the end of this month, and risks ejection from the 19-nation Eurozone which looms as a giant unknown to global investors.

The uncertainty surrounding Greece has sparked a bout of , pushing more investors toward U.S. government-backed bonds which are generally considered among the safest asset classes in the world.

MBS are government-backed, so mortgage rates have dropped on the news.

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NYSE Outage & China Affecting Mortgage Rates, Too

But, that’s not all that’s driving today’s low rates.

In China, the Shanghai Index has lost one-third of its value in the last 4 weeks, even as regulators work to slow to rout. Trillions of dollars in wealth have been lost as investors scramble for the exits — if they can even find them! More than 40% of stocks on the exchange are “frozen”, unable to trade.

Money that can leave the Chinese market is also making its way to safer destinations — yet another reason why have dropped so low this week. The world is in search of safe places to park some cash and the MBS market abides.

And, just when investors thought they had seen it all, a series of outages in the United States gave the mortgage bond market another push up.

Wednesday, United Airlines grounded all of its planes on a “router issue”; popular websites including The Wall Street Journal went dark; and, the New York Stock Exchange halted traded at 11:30 AM ET, citing an “internal technical issue”.

These events are likely unrelated, however, when the NYSE outage began, mortgage bonds began to climb, pushing mortgage rates lower nationwide.

Rates remain cheap and headed lower. Some lenders report a 37.5 basis point (0.375%) improvement as compared to last week; and VA mortgage rates and FHA mortgage rates are pricing even lower.

It’s an excellent time to look at today’s live rates.

Get Today’s Live Mortgage Rates

Mortgage rates dropped below 4 percent earlier this week and are making an extended slide lower. Refinance mortgage rates are as low as they been in weeks; and home buyers can now finance homes more cheaply.

Get started with a live rate quote today. Rates are available online, at no cost, and with no obligation to proceed. Your social security number is not required to get started.

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Dan Green
Authored By: Dan Green
The Mortgage Reports contributor
Dan Green is an expert on topics of money and mortgage. With over 15 years writing for a consumer audience on personal finance topics, Dan has been featured in The Washington Post, MarketWatch, Bloomberg, and others.