At this time last year, geopolitical uncertainty surrounding the Euro debt crisis in Europe was driving mortgage rates lower here at home. Today, international events – this time in Ukraine – are having a similar impact.
As a rule, markets “dislike” uncertainty. And the prospect of civil unrest and the potential for civil war in Ukraine is causing markets to react. Events like this typically cause investors to seek out the “safe haven” of bonds, including mortgage bonds. As more investors buy mortgage bonds, that usually drives mortgage rates lower.