Recent Economic News Affect Mortgage Rates
When the economy is good, mortgage rates are higher and bad for the mortgage industry. Whenever the government reports a good employment announcement report, it is bad for mortgage rates. The stock market is a different story. If there are good economic numbers released, the stock market rises, which is great for investors. Good economic data fuels the stock market. Good employment numbers will boost the stock market. The opposite is true for mortgages. Good news means higher interest rates which yields bad news for mortgage rates and the mortgage industry.
Recent employment data reports that the United States has added 257,000 jobs in January 2015. Employment data for November and December 2014 has been changed to reflect a sharp increase. The economic news also reported that employment wages has increased as well. Private sector hourly average wages for U.S. workers has also increase by 0.50% from December 2015 figures. Recent employment figures show that the past three months has been a record breaking record when it comes to employment gains in the United States in 17 years.
Recent Oil Rally
The recent oil rally in the past several weeks has been the largest oil rally since 1998. Economists and analysts were extremely concerned that the constant drop in oil prices week after week was going to damage the economy of the United States and have inflation at very low levers. An immediate 180 degree turnaround has the bond market in full gear and market analysts and industry experts, and economists are expecting an inflation rate annually of 1.49% for the next five years. The adjustment was just made of the 1.49%. Just a little over amonth ago, the figure was 1.07%.
Announcement From The Federal Reserve Board
The Federal Reserve Board is predicting that rates will be going up the second half of this year. Other industry analysts and economist as well as Wall Street experts agree that the Federal Reserve Board will be increasing rates starting the second half of this year.
2015 Outlook On Mortgage Rates
The combination of great economic news, rally on oil prices, and the Federal Reserve Board planning on increasing mortgage rates is a deadly combination for mortgage rates and the likelihood of mortgage rates increasing is inevitable in the second half of 2015. Unless there is drastic bad economic news, mortgage rates will go up. Great economic news and a stock market that will not correct means that it is bad news for U.S. Treasuries as well as Mortgage Bonds and means that mortgage rates will be going up.
A recent survery from Bloomberg predicts 10 year U.S. Treasuries to spike up to 2.71% from the current 1.93% which means that mortgage rates are on an upward swing.
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