Mortgage Rates on the Rise as Equities Recover
As expected, mortgage rates climbed during Thanksgiving week as equities recovered based on speculation of economic expansion. In fact, these market conditions led the Dow Jones Industrial Average to record highs. In general, with election season fading into the rearview mirror and with Trump beginning to assemble the foundations for his political team, it’s expected that markets will return to a sense of normalcy after their initial uncertainty. That’s not to say that we won’t see any more volatility; in fact, market experts expect that, even if things are settling down now, we should expect a few more market surprises in the foreseeable future.
Any political concerns aside, it’s important to note that mortgage rates are increasing, just as this blog has predicted on numerous occasions. More specifically, just before Halloween, the average 30-year APOR was about 3.52%. By the end of the first week in November, that rate had recorded a modest increase and risen to 3.58%, while it rose again the following week to 3.61%. By the end of Thanksgiving week, the average 30-year APOR had increased to about 3.98%. Likewise, MarketWatch estimates that the average 30-year FRM has increased from 4.03% to 4.08% since last week, while the 15-year APR is seeing gains as well. Overall, mortgage rates are hitting some of the highest rates seen in a year.
Now, these increases are not necessarily monumental; it’s not as if mortgages suddenly catapulted into double digits over the course of the week (if that were the case, I would have written this blog with a lot more capital letters and exclamation points). That said, even an average person without the slightest knowledge of the mortgage world should notice the generally upward trend of the aforementioned rates. While still low, mortgage rates are certainly increasing, and the upward trend looks likely to continue in the future. Indeed, many experts are expecting the Fed to hike interest rates in December, especially since recent estimates suggest strong job growth with roughly 178,000 new jobs added in November (as of now, the current national unemployment rate is at its lowest since August 2007). If the Fed were to increase interest rates, an increase of mortgage rates would likely follow. Additionally, other experts are suggesting that the new conventional range for mortgage rate fluctuations will be between 4% and 4.25%. To put these numbers in perspective, the average 30-year FRM was hovering between 3.4% and 3.6% from July until November.
Of course, these rates are still low, and they are not nearly as high as the inflation-influenced rates of the 1980s. However, even a modest increase in average mortgage rates will also increase the monthly cost of owning a home. As such, any prospective home buyers on the market should lock down a mortgage as quickly as possible, thus staving off higher interest rates and decreasing the overall monthly cost of home ownership.
For advice on securing your mortgage rate before rates rise higher, contact Cody Touchette, MLO # 83216, Pickett Street’s preferred lender.
Call us today for more information: #425-502-5397 or firstname.lastname@example.org