The upside to a down stock market

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Down Market


2016 should prove to be a good environment for mortgage rates.

With the Feds’ first interest increase behind us, mortgage rates really have not moved much.

The stock market, which has had its worst start in years, is keeping rates low. Usually when stocks suffer rates benefit from that. It’s like an hourglass. When you turn it over, the sand moves from the top to the bottom. The same goes for investment money. It usually flows from stocks to bonds or from bonds to stocks.

Weakness in the China market, lower oil prices and a stagnate economy in Europe also have kept rates down. So has low inflation and wage inflation. Historically home prices rise in tangent with wages. Wage inflation has been absent for quite some time.

Low mortgage rates are fueling the market for purchases and refinancing. Year-to-date mortgage application for new and existing homes has been acceptable, which is really bucking the trend given the weakness in economies abroad and lower oil prices.

The Fed’s future interest hikes will be very data dependent. Moving to0 soon could slow our economy and push us into the brink of recession.

To contact me, call 773-557-1000 ext. 15, e-mail or visit

About Ron Ricchio

Renato (Ron) Ricchio is president of Chicagoland Home Mortgage. He grew up in Westchester and attended St. Joseph High School and DePaul University, taking a job as a loan officer in the mortgage industry soon after graduating with a bachelor's in finance in 1991. He started his own company in 2001, which he operates today. He has been ranked in the top 150 loan originators in 2010 and 2011 by Origination News. Ron is happily married with three beautiful children. A board member of San Francesco Di Paola Society and the founder of Ricchio Family Toy Drive for Lurie's Children's Hospital, he enjoys cooking and spending time with family and friends.

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