We wanted to reach out with a quick update on the interest-rate environment. Today’s employment report reflects a demonstrable slowdown in new job creation. The market is now fearful of a full-fledged recession vs. a “soft landing.” As a result, the equity markets are getting beaten down substantially, and money is leaving equities for the bond market. Treasury yields are falling dramatically, with the 10-year yielding 3.82% as of this morning. To put that in perspective, the closing yield last Friday was 4.18%. A rate drop of this size is a big deal.
The benefactor of the lower treasury yields will be the mortgage market. We expect to see rates start falling into the high 5% range in the next week or so. Our recommendation is to reach out so we can review your current mortgage and analyze any potential savings from refinancing to a lower rate or changing amortization terms from a 30-year loan to a 15- or 20-year loan. Also, be cognizant of any hybrid loan that might be adjusting in the next year. This could be an advantageous time to switch to a longer-term vehicle for more stable, predictable payments.
As always, we appreciate your contact and are always pleased to run “what-if” scenarios. Thank you from all of us at Centek Capital!