Dow is Looking Strong

Yesterday was the 20th time the Dow has ever broken 11,000, the last time being June 2001. The highest level the Dow has ever attained was 11,722 on January 14, 2000. The longest time the Dow has ever held its ground above 11K was August of 2000, when it held for 24 days. In October of 2002, the Dow hit a low of 7,286.

What does this mean for mortgages? While the Dow is down so far today (I write this at 10:56 a.m. CST), it is still above 10,940, a level which for months has been a "ceiling," pushing down whenever the dow approached it. Now that the Dow has broken through this ceiling, it may become a level of "support." If 10,940 does become a level of support, this will draw money away from bonds and into stocks. The end result will be less money available for mortgages, and in turn, higher interest rates.

I don't see any drastic moves coming in the near future, but this is definately a trend that I will be watching in order to make sure my clients are getting the best rates available.