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Wednesday, February 26th
“I am a marvelous housekeeper. Every time I leave a man I keep his house.”
-Zsa Zsa Gabor
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Markets Today
🌏 Asia-Pacific: Mixed
🇪🇺 Europe: Up
🇺🇸 United States: Up
🛢️ Oil: Down
⚡Crypto: Down
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Major Market Events
- Trump says Apple should eliminate ‘very bad’ diversity policies
- NVIDIA down slightly ahead of crucial earnings report
- Jeep maker Stellantis reveals 70% profit drop in 2024, sees return to growth in 2025
🤔 My Thoughts
The weird logic of interest rates is one of our favorite topics to cover…
And right now it’s playing out in favor of people who want to buy a house or car, as mortgage rates slip to 6.68%, the lowest level this year.
Of course that’s awfully steep for those of us who remember the 3% rates of 5 years ago…
But it’s a move in the right direction for real estate and debt markets.
Why is it declining? Well many people track the Fed rate moves… and of course those do have a huge impact on markets…
But the far more important variable for mortgage interest rates is US treasury yields. And as people sense equity market weakness and buy up treasuries, that demand depresses the value, and people who want conservative yields look to the mortgage market, bringing down the yield there as well.
So bad news for the markets, is good news for homebuyers.
So at least when the markets tumble I can tell myself that its good news for the real estate I own…
And this is why a diversified approach to investing is so crucial. There’s no such thing as everything collapsing at once if you have truly uncorrelated assets.
