If you thought 2015 was a crazy year for fluctuating interest rates and all the inconsistent economic data being fed to us about the state of the US economy, then brace yourself. For what has already been one of the worst starts in recent history for the stock market, January has been a grueling month for investors with total losses soaring at $2.2 trillion in the US - the Dow Jones industrial declining 5.5% and 8% for the Nasdaq.
Contrary, mortgage interest rates have dropped again to levels we've seen before the Federal Reserve announcing their rate hike on December 16th, despite prime now being at 3.5% versus 3.25%. If you're a homeowner or a prospective buyer in the real estate market, then there is something to be optimistic about - real estate.
While you may have lost some of your down payment funds in the volatile stock market, the upside is that interest rates are indirectly affected by the performance of stocks. When stocks perform poorly, the bond market becomes more attractive, thus yields and interest rates fall.
Despite the fact that Central Bank's Chairman, Janet Yellen is holding to the Fed's position for another rate hike in March, economic data otherwise suggests a global economic slowdown is already happening, which is the result of China's slowed-growth and crude oil plummeting. Hedge fund billionaire George Soros says "we are repeating [2008]" but this time it isn't from those bad sub-prime mortgages (don't make a "Big" short), but from China and it's deflationary forces transmitting all over the world.
Deflation is a real concern and was a hot topic at the World Economic Forum in Davos earlier this month.
So, if you've taken a hit in the stock market and are perhaps bearish about your money, at the very least you can - and should - take advantage of lowering your current interest rate or feel confident about securing an even lower mortgage interest rate if you're in the market and considering buying real estate.
With all the bad that comes from the disastrous performances of your investments, just remember that you can reach for the oxygen mask because cheap money gives you more purchasing power in real estate.