Economic News Affect Mortgage Rates And Demand For Homes

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Economic News Affect Mortgage Rates And Demand For Homes

This BLOG On Economic News Affect Mortgage Rates And Demand For Homes Was UPDATED On October 27th, 2018

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

Employment Data Economic News Affect Mortgage Rates

Recent employment data reports that the United States has added 257,000 jobs in August 2018:

  • Employment data for July and August 2018 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 2017 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
  • 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 a month 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.

2019 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:

  • The likelihood of mortgage rates increasing is inevitable in the second half of 2018
  • 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
  • This signals mortgage rates will be going up

A recent survey from Bloomberg predicts 10 year U.S. Treasuries to spike up to 2.71% from the current 1.93%. This means that mortgage rates are on an upward swing.

Borrowers needing pre-approval, click APPLY NOW FOR PRE-APPROVAL or call us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.

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