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December 8, 2023
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December 8, 2023
Important Job Reports Released This Week
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Back in 1971, the average mortgage rate was around 7.33%, a little bit higher than where we're at today. If someone waited for interest rates to go down, they wouldn't have purchased a home until 1993! That person would have rented for 22 years waiting for rates to go down! The worst part is that home values quadrupled in that timeframe.
While, we're not likely to wait another 22 years for rates to dip below 7%, the days of 3% and 4% might be gone for good. The norm might be about 5.5% to 6.5%.
This could have been a market mover week for mortgage rates due to the job numbers coming out from ADP and the Bureau of Labor Statistics. If they were strong job numbers, it would have sent interest rates much higher.
The BLS report came out this morning, and this is one of the most influential reports the Fed relies upon for monetary policy. It can dictate the direction of the federal funds rate. In other words, should the Fed continue to increase rates, decrease rates, or leave them alone?
Fortunately, the job numbers aligned with market expectations, keeping the mortgage rates relatively stable, just above 7% for a highly qualified conventional borrower. These numbers come out from Mortgage News Daily, a great online resource.
FHA and VA homebuyers now can typically get a rate below 7%. An FHA loan is an attractive option because it carries lower rates, and they reduced the monthly mortgage insurance premium in May. It's a very attractive loan.
Next week could be another "hold your breath" week, because we get inflation numbers. The CPI, Consumer Price Index, comes out. It is also the last federal funds meeting of 2023. The markets are always trying to interpret each and every word that Fed Chairman, Jerome Powell, says after the meetings.The markets are anticipating no further increase in the federal funds rate this year. Let's hope that's the case and they come down next year.
Finally, the conventional loan limit increased in Clark County to $766,550 and FHA increased to $498,257. With these increases, a first-time homebuyer could potentially purchase a home on a conventional mortgage of approximately $790,000 with 3% down. On an FHA loan, a homebuyer could potentially buy a home worth around $516,000 with 3.5% down. And on FHA, the buyer does not have to be a first-time homebuyer!
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The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
Mortgage News Daily (MND) is a trademark of Brown House Media, Inc. Zillow is a trademark of Zillow, Inc. CrossCountry Mortgage has not been authorized, sponsored, or otherwise approved by Brown House Media, Inc. or Zillow, Inc.
Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.
