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Rates climbed to 7.24% this week! What’s driving the increase? Two key factors: jobs and inflation. Strong job growth often leads to higher inflation, and today’s Bureau of Labor Statistics report reflected just that.
Expectations were for 160,000 new jobs, but a whopping 256,000 were added instead! Even more surprising, the Household Survey showed 478,000 job gains, and the unemployment rate dropped to 4.1%.
The kicker? Most jobs created were by those under 24, not prime working-age individuals. Despite this, Wall Street reacted swiftly, pushing rates higher.
The Trump Effect or a House of Cards?
Change is here. Whether good or bad, Trump’s policies are shaking up the status quo, sparking economic optimism—and uncertainty. For now, rates are likely to remain elevated until clear trends emerge from real data over the coming months.
So, What’s the Good News for Homebuyers?
• Less Competition: Higher rates mean fewer buyers, giving more negotiating power.
• Stabilizing Home Prices: Property value increases are leveling off, making it a great time to find a home without overpaying.
The biggest hurdle right now is high mortgage payments. Builders are addressing this with incentives to lower rates, focusing on making monthly payments more affordable rather than lowering home prices.
Sellers of existing homes are also getting creative to compete by offering concessions like permanent rate buydowns, 2/1 buydowns, or help with closing costs.
Why a Buydown Beats a Price Drop:
Consider a $500,000 home with 5% down:
• A $20,000 price reduction saves approximately $130/month.
• A 2/1 buydown saves approximately $500/month in Year 1 and $250/month in Year 2.
The cost for the 2/1 buydown is less than a price reduction… approximately $12,000 compared to $20,000!
Sellers benefit by maintaining home value, and buyers get a manageable monthly payment. For more details about how this works, reach out for personalized advice. We’re here to help you navigate your options and find the best deal!
Featuring:
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.
