Mortgage Rates Increasing With Good Economic News
This Article Is About Mortgage Rates Increasing With Good Economic News
Until recently, mortgage rates have been steadily declining since the start of 2019.
- We have mortgage rates that hit a three-year low
- However, mortgage rates have been creeping up the past few weeks
- When the Federal Reserve Board announced a 25 basis point rate cut, mortgage rates went up instead of down
- Since the last interest rate cut by the Feds, mortgage rates have been slowly increasing
- Good economic news means higher mortgage rates
In this article, we will cover why Mortgage Rates Increasing With Good Economic News.
Mortgage Rates Increasing During Hot Housing Market
Low rates are great news for homeowners refinancing and homebuyers buying new homes.
- The housing market is hot
- Homes are appreciating nationwide
- Some areas are seeing double-digit annual appreciation
- Many homeowners and buyers sitting on the sidelines are now thinking twice about refinancing and/or buying a home
- Experts predict that rates will not stay low forever
- The demand for housing still remain strong
- Rates are dependent on the economy and what the Feds will do in the coming weeks and months
- Mortgage borrowers should not panic
Rates go up and down. Rates are dependent on the bond market.
Reasons Why Mortgage Rates Increasing
With multiple good news back to back, mortgage rates increasing.
- The Federal Reserve Board cut rates and is expected to lower interest rates even further
- The stock markets are at an all-time high with no signs of any correction
- Unemployment numbers have been at a 50 year low
- Inflation is almost non-existent
- Manufacturing numbers are setting historical records
- Minority unemployment numbers are at historic lows
President Trump seemed like he has reached the Tariff Fiasco with China and other world leaders.
Hot Housing Market
Home values are increasing nationwide with the exception of high-taxed states.
- HUD, the parent of FHA, has increased FHA Loan Limits for the past three years due to rising home prices
- 2019 FHA Loan Limit is capped at $314,827
- The Federal Housing Finance Agency has followed HUD’s lead and increased Conventional Loan Limits for the past three years
- 2019 Conforming Loan Limits is now capped at $484,350
- There is no sign of any market correction in the near future
Our economy has been thriving for the last 11 years with no signs of a recession.
Subprime And Alternative Financing Is Back
The housing market is a strong indicator of what the economy is doing. The launch of non-QM and bank statement loans for self-employed borrowers have intensified the strong housing market. Other alternative mortgage programs such as asset depletion, fix and flip loans, and alternative financing loan programs added fuel to the fire to the housing market. More people are investing in real estate since the 2008 Great Recession and Housing Collapse. Many lenders have eased mortgage guidelines on government and conventional loans. Borrowers who do not qualify with government and/or conventional loans can now have alternative mortgage programs available to them at competitive rates.
October 23, 2019 - 3 min read