The stock market sold off for most of the first quarter of the year and was down at times as much as 12%. The second quarter of the year has started on a much more positive note and with recent activity on the merger and acquisition front heating up this could pose an interesting challenge to mortgage rates. Historically you tend to see mortgage rates move up as the stock market rallies. More investors tend to pull their money out of the bond market and this creates a need for a higher yield to make these investments more attractive. The market has already risen from it's 2008 lows in January, and the dramatic rise in oil prices and inflation will only further pressure rates. The probability of mortgage rates moving lower seems to be diminishing. Some large merger acquisition that are now coming into the market are only likely to further push stock prices up. Starting with Microsoft's bid for Yahoo earlier and Wrigley and Ford in the news their is sentiment the stock market could continue to climb past 13,000 in the near future despite the continue slow down in the real estate industry. 

4-28-2008©LowRateMortgage.com

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