26
Mar
By First Rate Financial Group
Mortgage

What Causes Mortgage Interest Rates To Fluctuate?

What Causes Mortgage Interest Rates To FluctuateThe mortgage interest rate represents the cost of borrowing money to purchase a property. Mortgage interest rates are not fixed; that is, they fluctuate from one period of time to the next.

Many different factors play into what your mortgage interest rate will finally turn out to be. Some of these factors have to deal with the economy and government decisions. Other factors have to do with your personal financial situation.

Finally, mortgage interest rates can differ between lending institutions, which is why you may get different mortgage interest rate quotes from different places.

Economic Factors That Cause Mortgage Interest Rates To Fluctuate

Mortgage interest rates are somewhat connected to the stock market. When the stock market indexes go up, mortgage rates tend to rise as well. The Consumer Price Index is a measure of inflation rates. When inflation rises, you can expect to see mortgage interest rates go up, too. Other economic factors that affect mortgage interest rates include Data from the Gross Domestic Product, Consumer Confidence, and Home Sales reports.

Government Decisions That Lead To Mortgage Interest Rate Changes

The federal government keeps close tabs on the economy. Government officials are always making adjustments in order to keep the economy strong. Periodically, the government will raise or lower key interest rates in order to adjust bank lending economics. When the government raises or lowers the Federal Funds interest rate, it is always announced in the media.

Personal Financials And Your Mortgage Interest Rate

Finally, your personal financial situation influences what kind of mortgage interest rate your lender offers. A higher credit score will generally get you a lower mortgage interest rate. This is another reason why it’s always a good idea to review and improve your credit score before applying for a mortgage.

When you are ready to apply for a mortgage, meet with a trusted home mortgage professional. Because mortgage interest rates fluctuate often, you could find that the interest rate gets higher in the short time in which you’re still shopping for your home. Once you do find an attractive program for your personal situation, be sure that you are ready to take the necessary steps to lock in that rate.

 

 

 

25
Mar
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 25th, 2019

What’s Ahead For Mortgage Rates This Week – March 25th, 2019Last week’s economic news included readings from the National Association of Home Builders, Federal Reserve Federal Open Market Committee and a press conference by Fed Chair Jerome Powell.

Sales of pre-owned homes in February were reported along with weekly readings on mortgage rates and new jobless claims.

NAHB: Builder Confidence Unchanged Despite Headwinds

Home builders remained confident about housing market conditions in March. The NAHB Housing Market Index posted a reading of 62, which matched February’s reading and fell one point short of expectations. NAHB Index readings above 50 represent a positive outlook on housing market conditions.

Home builders continued to face obstacles including high materials costs and lack of buildable lots and labor. Analysts said builders focused on building larger homes, which were not affordable for many prospective buyers.

FOMC: Fed Puts Brakes on Interest Rate Hikes

Monetary policymakers reversed course on raising the target range for federal funds and voted not to raise the current rate range of 2.25 to 2.50 percent. FOMC members cited global economic concerns including Brexit and wavering economic conditions in China.

While the U.S. Labor sector was strong with ongoing jobs and wage growth and low national unemployment, FOMC members said that the Fed could be “patient” about raising rates and did not expect to raise rates in 2019. Slowing economic growth and inflation were reasons for holding interest rates steady.

Fed Chair Jerome Powell described the current economy as “good” and said that the Fed would gradually roll back its accommodative purchase of treasury bonds. This news was likely to cause yields on 10-year Treasury notes to fall; this would cause mortgage rates to fall due to their connection with 10-year Treasury notes.

Pre-Owned Home Sales Hit 11 Month High in February

The National Association of Realtors® reported 5.50 million sales of pre-owned homes on a seasonally-adjusted annual basis. February sales reading fell short of 5.12 million sales expected but were higher than the rate of 4.93 million sales in January.

February’s reading was 11.80 percent higher than January’s sales. The sales pace was 1.80 percent lower year-over-year, but the median sale price of preowned homes was $249,500., which was 3.60 percent higher year-over-year.

First-time buyers accounted for 34 percent of sales; this falls short of the typical 40 percent participation rate for first-time buyers. Affordability and strict mortgage qualification requirements continued to challenge first-time and moderate-income buyers.

Mortgage Rates, New Jobless Claims Fall

Freddie Mac reported lower average rates for fixed rate mortgages. 30-year fixed mortgage rates were three basis points lower and averaged 4.28 percent; Mortgage rates for 15-year fixed rate mortgages averaged 3.71 percent and were five basis points lower on average. The average rate for a 5/1 adjustable-rate mortgage was unchanged at 3.84 percent. Discount points averaged 0.40 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

First-time jobless claims were lower last week with 221,000 new claims filed. Analysts expected 225,000 new claims based on the prior week’s reading of 230,000 new claims filed.

What‘s Ahead

This week’s scheduled economic news includes readings on housing starts and building permits issued, new and pending home sales and inflation. Weekly readings on mortgage rates and new jobless claims will also be released.

18
Mar
By First Rate Financial Group
Financial Reports

What’s Ahead For Mortgage Rates This Week – March 18th, 2019

What’s Ahead For Mortgage Rates This Week – March 18th, 2019Last week’s economic reports included readings on retail sales, inflation and construction spending. New home sales Consumer sentiment readings were posted along with weekly readings on mortgage rates and first-time jobless claims.

Retail Sales Increase after Lowest Reading in 10 Years

Retail sales rose by 0.20 percent in January; analysts expected an increase of 0.10 percent based on December’s negative revised reading of -1.60 percent. Home centers and internet retailers led in overall sales; retail sales without the automotive sector were higher with an 0.90 percent increase in January, which exceeded expectations of an 0.40 percent increase.

December had a negative reading of –2.10 percent. Auto dealers had fewer sales to car rental firms and other business customers; the reading for retail sales excluding automotive sales rose 0.90 percent as compared to expectations of 0.40 percent more sales and December’s reading.

Inflation rose 0.20 percent in February, which matched expectations after a flat reading in January. Core inflation, which excludes readings for volatile food and fuel sectors, rose 0.10 percent, which fell short of 0.20 percent in January.

Construction Spending Rises as New Home Sales Fall

Commerce Department readings for construction spending rose 1.30 percent in January as compared to December’s negative reading of -0.80 percent. The end of the government shutdown likely helped return construction spending return to positive territory, but real estate and mortgage pros said that building more homes is the only solution to persistent shortages coupled with high demand for homes by would-be buyers.

Slim inventories and home prices rising in excess of wages and inflation are factors contributing to fewer eligible buyers. New home sales fell in January, which is not unusual for winter sales. 607,000 new homes were sold on a seasonally-adjusted annual basis in January; 652,000 new home sales were reported in December, but analysts expected a lower reading of 616,000 sales for January.

Mortgage Rates Fall as New Jobless Claims Rise

Freddie Mac reported lower average mortgage rates last week with rates for 30-year fixed rate mortgages averaging ten basis points lower at 4.31 percent. !5-year fixed rate mortgages averaged 3.76 percent after falling seven basis points. 5/1 adjustable-rate mortgages averaged 3.84 percent and were three basis points lower. Discount points averaged 0.40 percent for fixed-rate mortgages and 0.30 percent for 5/1 adjustable rate mortgages.

Initial jobless claims rose to 239,000 new claims last week; 223,000 claims were filed the prior week and analysts expected 225,000 new claims. Last week’s first-time jobless claims were the highest in ten years, but analysts said that layoffs haven’t risen significantly, which signals healthy labor markets.

The University of Michigan reported higher consumer confidence in March with an index reading of 97.80. The expected reading was 95.0 based on February’s index reading of 93.80. Increased consumer confidence in economic conditions suggests that more families will enter the housing market. Analysts said rising consumer confidence resulted from the resolution of the government shutdown.

What’s Ahead

Economic readings scheduled this week include reports on homebuilder confidence in housing market conditions, sales of pre-owned homes and Commerce departments on housing starts and building permits issued. The Federal Reserve’s scheduled announcement will be followed by Fed Chair Jerome Powell’s press conference. Weekly reports on mortgage rates and new jobless claims will also be issued.