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May 3, 2024
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May 3, 2024
Have We Made It Over the Last Hump of the Rate Roller Coaster??🎢
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Have we made it over the last hump of the interest rate roller coaster??🎢 We may just have, and it could be all down hill from here! Rates climbed above 7.5% mid-week and ended up around 7.25% today.
What happened this week? Jobs data and the Fed meeting. There are essentially two things the Fed has been focused on: inflation and jobs.
Last week, we heard that inflation continues to be persistent and not coming down as quickly as the Fed would like. This week was about jobs data and listening closely to what Fed Chair Jerome Powell had to say after their two-day meeting this week.
Job growth missed expectations. The ADP jobs report was a little higher than expected, but the Bureau of Labor Statistics (BLS) report missed. This was the first report in recent memory that actually came in lower than expected, and we saw an increase in the unemployment rate from 3.8% to 3.9%.
One interesting fact is that the average number of hours worked has also been on the decline. In fact, it is almost at the same level of hours worked back in 2011. This is hidden in the numbers but can have a big impact on employees and their overall take-home pay to survive.
What does this mean for interest rates and the real estate market? It could mean we are headed down!
Based on the data, Wall Street might start buying Mortgage Backed Securities (MBS), which will lower rates. Also, the Fed stated they will also likely start buying MBS again in June, further helping the mortgage rates.
The Case-Shiller Home Price Index came out this week showing home values increased year-over-year DESPITE the elevated interest rates.
Those buyers that can qualify now but are waiting until rates come down could lose out on significant wealth building by waiting. It’s a lack of supply of homes keeping values strong, not an interest rate issue.
As hard as it is to pay a higher mortgage payment than what you may be comfortable with, the house you want may be out of reach if you wait.
Furthermore, you will almost assuredly have a refinance opportunity down the road to lower your payment in the future. This way, you can lock in a lower home price, get the home you want, and eventually get the mortgage payment you desire.
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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.
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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.
