In many ways, there are many aspects of different financial markets that interact to affect mortgage interest rates. It may seem like a stretch, but it is true that mortgage interest rates can be affected by what oil prices are doing.
The Mortgage Reports offers this explanation of oil prices and mortgage interest rates:
But when energy costs increase rapidly, the ripples can make like a splash, sinking the mortgage market along with the entire economic ship and when the mortgage market fails, prices drop and rates go up.
Last week, mortgage interest rates increased (and mortgage applications dropped) as oil prices moved to record highs. Perhaps this week, as oil prices fall a bit, mortgage interest rates will come down a little. We'll have to see.
image credit: sxc.hu
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