It's Greek to Me

Posted by Laine Smith on 7/13/15 10:03 AM

Topics: Economy

"It's Greek to me" is a commonly used phrase in the United States to express confusion, which may be exactly what you're currently feeling about Greece's surmounting debt crisis. So what does Greece's economic downturn have to do with US homebuyers? See here.

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Image courtesy of Ventrilock at FreeDigitalPhotos.net

In the aftermath of the United States' own recession, homebuyers have enjoyed and greatly benefited from historically low mortgage interest rates due to a weak recovery and support from the Federal Reserve.

So far in 2015, the Federal Reserve has indicated their accommodative monetary policy would be coming to an end with an increase in their short-term rates, which would affect US mortgage rates.

While the performance of the US economy is a primary concern in increasing short-term rates, Greece's crisis is a contending factor in pushing back that rate hike.

Last week, though, mortgage rates for 30-year fixed-rate loans fell for the first time in three weeks as uncertainty in Greece caused investors to seek the security of U.S. capital, like mortgage-backed securities, according to Bloomberg News.

Overall, as Greece faces the worst economic downturn of any developed nation since World War II, the ripple effect in the US has the potential to keep mortgage rates low for 2015 US homebuyers.

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