This has been an interesting week in the mortgage market – especially for those watching interest rates. It has been interesting to watch the market reactions to both the Jobs week numbers and the situation in Iran. This is not intended to be political at all, but the situation in Iran is affecting interest rates.
The conflict with Iran has moved financial markets due to the impact on oil prices. The bond market has reacted as many investors now fear inflation numbers increasing due to the rise in oil prices. Why? Because higher oil costs equal higher transportation costs and production costs. And that could lead to higher inflation which is a major concern when the Fed looks at interest rates.
This week also brings the Jobs reports, the ADP report came out already and showed that there were 63,000 new jobs added. This was above expectations of 53,000 new jobs and up from last month. Friday we will get the BLS jobs report which economists expect to see about 55,000 new jobs added. That could sway the numbers depending on how the report comes in.
Service sector pricing data showed inflation pressures remain elevated which causes concern.
We’ll see what the Fed thinks when they meet in March, but right now rate are up a bit. We don’t know how numbers will play out over the next month or two. They are still lower than they were, but up about a .25 point. This is how it affects your mortgage payment:
On a $400,000 loan using principal and interest only payments:
At 5.99%
Payment is about $2,396 per month
At 6.125%
Payment is about $2,430 per month
At 6.25%
Payment is about $2,463 per month
At 6.375%
Payment is about $2,496 per month
This may only be a $100/month difference in payment but that can affect qualifying and also how buyers feel about the payment. Coality released their January Home Price insight and they are forecasting a 4.4% national home price appreciation this year. This means home prices will probably increase and with rates moving around a bit, it may be time to buy sooner than later.
For those not sure what they qualify for, please reach out and we can talk about options and ways to try and save money when you are looking at homes.
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
