Holden LewisSenior reporter, Bankrate.com
Tension in Korea plus fear of debt in the eurozone drive money to our shores, making loans cheaper.
Cameron FindlayChief economist, LendingTree.com, Charlotte, N.C.
Rates will go lower, but only slightly. Mortgage spreads have already pushed out to 93 basis points from their March 10, 2010, low of 59 basis points. This spread went as high as 238 basis points in March 2008. The market distraction from North Korea and the continuing euro concerns will continue to push investors toward the safety of dollar-denominated bonds. Expect bond prices to continue to push higher (rates lower), but limited to the downside by the fact that spreads are widening. Said another way, Treasury rates will decline faster than mortgage rates.