This has been an interesting week and maybe month in the mortgage industry! Mostly to do with the bond market and interest rates. I would love to say rates are lower but unfortunately, they have been increasing. So what has been driving this change?
Most of what has affected interest rates is geopolitical and energy prices. This week we saw initial jobless claims come in lower, falling to the lowest level since 1969, showing that layoffs are historically low.
Oil reached $100/barrel, which pushed bond yields higher and renewed inflation concerns. When energy prices rise, inflation follows and that makes it harder for the Fed to lower rates. U.S. military action against Iran also escalated. The US carried out it’s 12 consecutive strike.
Next week the Fed meets and it’s expected to hold rates steady but Chairman Warsh’s speech will be important. There are also those that think the Fed may raise rates. As of this morning, markets are pricing in a 38% chance that the Fed raises rates by .25 point next week.
Interest rates have risen about a .25 point and many are speculating that rates could be higher in the next month. No one knows for sure and a lot will depend on what happens in Iran and with oil prices. If you are looking at homes, remember you can always buy down the rate, look at a temporary buydown and refinancing is always a possibility. If you are concerned and not sure what to do, please feel free to reach out and we can have a discussion about your options and what you can do.
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
