Global issues can certainly be interesting, but are they really relevant to the mortgage market?
![Why the global market matters to the mortgage industry](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://us.res.keymedia.com/files/image/David%20Lykken.jpg)
On the June 22nd episode of the Lykken on Lending podcast I host, we spent a great deal of time discussing global economic issues. In fact, the conversations I have with my colleagues in the mortgage industry often center around what's going on in the global market. During that recent episode, though, a listener asked a question that really got me thinking: "What does all of this have to do with the mortgage industry?"
Talking about global economic issues certainly is interesting, but is it really relevant for leaders in the mortgage to understand how to navigate their businesses? This is an excellent question that I had never really considered. Are we wasting our time talking about issues that are abstract when we should be focusing on issues that are more concrete? Is it really that important for mortgage professionals in the US to know the states of economies in other countries. Yes, I think it is. Here's why.
Greece isn't really about Greece; it's about the strength of the European Union. Will Spain, Portugal, or some other country be next in defaulting? How will Russia's diplomatic decisions affect the rest of Europe? How much bigger will China's economy get? These questions are means to an end, because the answers to all of them affect how interest rates move. The direction of other countries has a direct impact on U.S. bonds, and U.S. bonds are highly correlated with mortgage rates.
Yes, it's important for mortgage professionals to understand what's going on in other countries. The global economy is the key driver of mortgage rates. Understanding the global economy, then, can help us predict and properly plan for the future before it blindsides us.
Talking about global economic issues certainly is interesting, but is it really relevant for leaders in the mortgage to understand how to navigate their businesses? This is an excellent question that I had never really considered. Are we wasting our time talking about issues that are abstract when we should be focusing on issues that are more concrete? Is it really that important for mortgage professionals in the US to know the states of economies in other countries. Yes, I think it is. Here's why.
Greece isn't really about Greece; it's about the strength of the European Union. Will Spain, Portugal, or some other country be next in defaulting? How will Russia's diplomatic decisions affect the rest of Europe? How much bigger will China's economy get? These questions are means to an end, because the answers to all of them affect how interest rates move. The direction of other countries has a direct impact on U.S. bonds, and U.S. bonds are highly correlated with mortgage rates.
Yes, it's important for mortgage professionals to understand what's going on in other countries. The global economy is the key driver of mortgage rates. Understanding the global economy, then, can help us predict and properly plan for the future before it blindsides us.