The Effect of Stock Market in California Mortgage Rates

The stock market has been very volatile over the last several days.The market was down almost 1000 points at the open, recovered to almost break even and then ended down around 600 points. The Dow Jones Industrial Average has been all over the map lately and many people are getting concerned when it comes to their finances. So, do California mortgage rates go down or up when the stock market is going down?

It is important to understand that the overall stock market does not directly affect mortgage interest rates. The 10 year treasury rate yield and the 30 year fixed mortgage rate have a very strong correlation but the S&P 500, NASDAQ and Dow Jones Industrial Average have almost no relationship with overall mortgage rates.

Some people will find trends during certain bear or bull markets in relation to California mortgage rates but the better predictor is the 10 year treasury rate yield. You can see a chart of the 10 year yield here. On average, the 10 year yield predicts 30 year fixed mortgage rates by about one or two weeks. If you are looking for longer term predictions for California mortgage interest rates you will likely want to study the chart of the 10 year yield in terms of the 50 and 200 day moving averages. The 200 day moving average tells you where the yield will likely go during the long term. For the short term you can look at 10 day and 20 day moving averages.

If you are looking to refinance your current home loan or simply get a lower interest rate on other loans now is a great time. Overall mortgage rates are extremely attractive and those that qualify will be able to save money. We encourage you to use our California mortgage calculator to help you determine how much you will spend on a monthly mortgage payment.