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Mortgages Drop, Stocks Pop

Matthew Allgood |

 

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Over the past year, we’ve seen a significant drop in mortgage rates, which historically has acted as a positive catalyst for stocks. When the average 30-year fixed mortgage rate declines by more than 100 basis points in a 12-month period, the S&P 500 on average returned over 12%. This relationship highlights how easing borrowing costs can fuel broader economic optimism and benefit equity markets. 

 

With rates currently down by 144 basis points over the past year, we could see a supportive environment for stocks going forward. As always, we remain focused on monitoring these trends and positioning portfolios accordingly.

 

Mortgages Drop, Stocks Pop

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Source: Bloomberg, FRED, Redwood. Data as of 9/27/2024. Date Range from 4/1/1971 - 8/31/2024.

 

 

Regards,

Allgood Financial

Disclosure: This piece is for informational purposes only and contains opinions of Redwood that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no representation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Past performance is not a guarantee of future results. The objectives mentioned are not guaranteed to be achieved. Investors cannot invest directly in any of the indices mentioned above. Diversification of asset class is not a guarantee against loss.

 

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