Much of his reasoning for lower rates in the wake of Sandy is the Federal Reserve and its ongoing bond market stimulus program. Habib says any inclination to pull back on economic stimulus will go by the wayside now that Sandy has hit the U.S. east coast.
"Part of the reason why bond prices are improving due to this news points to two things: We already know the Fed are buying mortgage bonds, which is helping [mortgage-backed security] pricing and keeping interest low," he adds. "I think you will be hard pressed to see the Feds taking their foot off the gas pedal when you see a devastating event like Hurricane Sandy creating a terrible drag on the economy."
For the housing market, that could mean good and bad news, Habib says, depending if you're a buyer or a seller.
"If I am a homebuyer or someone looking to refinance, this probably is good news for the longer term for interest rates to remain low; it also may create - based on the psychological effects of this terrible storm - a temporary drag on housing, which means this is a time period where people could get additional value," Habib says.
Should homebuyers dive in now and take advantage of the unfortunate aftermath of Sandy? Habib thinks so. Rates can't go much lower, and the Federal Reserve won't have a heavy boot on the stimulus gas pedal forever, he says.
For homebuyers, and for credit-needy consumers in general, Sandy may be a unique opportunity to save on a loan. That's hardly comforting to the millions of Americans who suffered from the storm, but that's how economics work.
In other words, one consumer's storm is another consumer's opportunity.