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Mortgage rates have hit an all-time low. The average interest rate on a 30-year fixed-rate mortgage dropped below 3% last week, to 2.98%.
This is a new record, as the economy grapples with the pandemic situation. On top of this, the 15-year fixed-rate mortgage also dropped to 2.48%. These new rates mark the seventh new low since March.
And I'm sure it comes as no surprise when I say that this downtick in interest rates has led to an increase in demand for homebuyers. In fact, many who work in the industry are running into too many buyers and not enough sellers.
This drop in interest rates isn't only bringing in new buyers, either - it's also pushing up mortgage applications from the previous years that didn't necessarily qualify, bringing even more eager buyers into the mix.
This surge in buyers and drop-in interest rates has investors eying stocks involved in the housing market. From housebuilders to real estate ETFs, the industry has seen an uptick in cash flow as the housing market continues to swell.
From iShares US Real Estate ETF to Real Estate Select Sector SPDR Fund, investors are sinking their cash into this industry, hoping to reap the benefits of historically low rates.
But I'm not buying into this hype literally or figuratively. I have another way to profit.
And here's why...
How I'm Playing Low Interest Rates (It's Not Real Estate)
I know it seems like the obvious answer is to join the hordes of investors in the real estate and housing sector. But if I'm honest, real estate is one that I personally won't be adding to my lineup anytime soon.
I have another investing "safe haven" to play this trend...
With interest rates dropping below 3%, the United States market, especially SPDR S&P 500 ETF Trust (SPY), is the best place you could put your money.
The fact is that currently, there is still so much money sitting on the sidelines. Continued pandemic uncertainty, despite the market's recovery, has kept people from getting all the way back in.
And with low rates like we're currently seeing, money managers aren't looking to tie their money up in one single sector. Instead, they will continue to turn to SPY.
When you buy SPY, you spread your dollars across all 11 sectors. And even with just one single purchase, you can own a piece of tech, consumer, real estate, and more.
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The drop in mortgage rates is just one more reminder of how unpredictable the economic landscape continues to be.
While this seems great for homebuyers and homeowners, who knows if the next twist the market throws at us will be a positive or a negative?
That's why my readers have come to rely on the recommendations from my S.C.A.N. trading system.
The steady, safe, profitable recommendations from my Project 303 trading service have come regardless of market conditions, and today's your chance to secure your spot.
About the Author
Andrew Keene, editor of the 1450 Club, Super Options, and Project 303 at Money Map Press, is a globally known trader and a renowned expert on all things options.