Mortgage interest rates are affected by certain other interest rates. When money is tight, interest rates go up. When money is easily available, interest rates go down. There are other influencing factors\u2014the length of time the money is borrowed for, and the purpose of the money (which is why credit card interest rates are much higher than mortgage rates). Still, it\u2019s a question of interest rates.<\/p>\n\n\n\n
As for the stock market: The stock market reflects investors\u2019 evaluation of the value of the companies making up the stock market (or stock market index). In general, a company is worth more if it\u2019s making more money. It\u2019s worth less if it\u2019s making less money or losing money. Also, it\u2019s worth more if investors think that the company will be worth more in the future.<\/p>\n\n\n\n
However, stocks don\u2019t move in total isolation. Stocks typically are part of a segment of the market\u2014biotechnology, consumer durables, chemicals, etc. Stocks within each often rise or fall together. If investors think people are going to buy more cars next year, car stocks may all rise, though perhaps Ford will go up more than General Motors.<\/p>\n\n\n\n
Interest rates can affect the performance of some stocks\u2014those that are interest-rate sensitive. Banks and utilities tend to be. But it doesn\u2019t really work the other way around. If auto stocks rise or bank stocks fall, that\u2019s not going to have much influence on interest rates.<\/p>\n\n\n\n
There\u2019s a slight indirect influence, though. If people decide that, in general, they don\u2019t want to invest in the stock market (due to volatility, for instance), then they\u2019ll look for other places to put their money. It might be in bonds (which do affect interest rates), real estate, cryptocurrency, precious metals, or a number of other things. So if people pull billions of dollars out of the stock market and invest that money in bonds, bond prices will go up and bond yields (and interest rates) will go down. As I say, though, the influence is slight and it\u2019s a lot more complicated than that.<\/p>\n\n\n\n
And if you already have a mortgage. . . .if it\u2019s a fixed-rate mortgage, then changes in interest rates won\u2019t affect you. If you have a variable rate mortgage\u2014one that adjusts every year, for example\u2014then your interest rate will go up or down based on what happens to interest rates. (Again, it\u2019s a lot more complicated than that\u2014it depends on what interest rate your variable rate mortgage is pegged to. Also, your mortgage will have a maximum and minimum rate so no matter how much interest rates fluctuate, your mortgage will always be constrained at the top and the bottom.<\/p>\n","protected":false},"excerpt":{"rendered":"
Mortgage interest rates are affected by certain other interest rates. When money is tight, interest rates go up. When money is easily available, interest rates go down. There are other influencing factors\u2014the length of time the money is borrowed for, and the purpose of the money (which is why credit card interest rates are much […]<\/p>\n","protected":false},"featured_media":0,"template":"","meta":[],"categories":[],"tags":[],"_links":{"self":[{"href":"\/nuuu\/wp-json\/wp\/v2\/faqpage\/1176"}],"collection":[{"href":"\/nuuu\/wp-json\/wp\/v2\/faqpage"}],"about":[{"href":"\/nuuu\/wp-json\/wp\/v2\/types\/faqpage"}],"wp:attachment":[{"href":"\/nuuu\/wp-json\/wp\/v2\/media?parent=1176"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"\/nuuu\/wp-json\/wp\/v2\/categories?post=1176"},{"taxonomy":"post_tag","embeddable":true,"href":"\/nuuu\/wp-json\/wp\/v2\/tags?post=1176"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}