Volatility continued Friday after the Labor Department reported that there were 175,000 new jobs created in May, which was better than expected. And even though the it beat expectations, the jobs were mostly in the service sector -the Bureau of Labor Statistics said food services and drinking places and retail trade were the jobs created. The 3% fell 69bp to end at 100.00, right on upport. Stocks blasted off again on the jobs data, the Dow was up 207.50 to 15,248.12, the S&P gained 20.82 to 1,643.38 while the Nasdaq was up 45.16 to
3,469.22. Oil was last seen at $96.23/barrel up $1.47.
Rates are Up. Now What?
Over the last three weeks mortgage rates have moved up by about a half of one percent. Comments made by Fed Chairman Bernanke regarding Bond purchase tapering and better than expected economic news spurred Bond selling which is why Mortgage Rates have moved higher.
So what do you do now? Well if your buying a home, be sure you and the sellers have clear closing date expectations. This will help you to time locking into a rate. If you are refinancing, be sure to work with a Mortgage Professional that monitors the Markets for signals of interest rate movements. A word of caution to those refinancing. If refinancing provides you with significant savings at the current rates, don’t hold out for them to move lower, as you put at risk guaranteed savings, to save a few more dollars. Be sure to have you Home Loan Application in process and don’t wait to do so until you hear of a good rate. The point is these markets are volatile and fast moving. So, you want to be in a position to Lock a Low Rate the instant its available.
Of course, the big question is what’s ahead for Mortgage Rates. Many market experts believe the rise in interest rates due to the sell off in Bonds is very over blown and expect to see a rebound. But no one really knows, as the markets swing in either direction depending on economic and world news. But lets get real; even at current levels Mortgage Rates are a great deal by historical standards.
Did You Blow Your Once-In-A-Generation Chance To Buy A Home?
The U.S. housing market crash of 2007-2008 presented a big opportunity for those in the market to buy a home. Mortgage rates lurched lower, continuing their downward trajectory to historic lows reached in late 2012. And, of course, home prices came way down. Now, there is concern that these trends are starting to reverse. Increased talk of tapering of monetary stimulus by the Federal Reserve has provided the impetus for the rise in interest rates in recent weeks. Read more
In a dramatic about-face for the housing market, sellers are now calling the shots.
A survey of more than 2,000 Americans found that 33% of the 365 who were searching for a home have been on the hunt for more than a year and many were willing to make compromises on where they live or the type of home they would buy in order to close the deal, Century 21 Real Estate reported Wednesday. “The recovery has transformed the mindset of many buyers and sellers who grew accustomed to the buyers’ market we saw for years,” said Rick Davidson, CEO of Century 21. “Buyer confidence is building back up and demand is strong… sellers are now in a more favorable position.” Read more
Economic News
ISM manufacturing unexpectedly contracted to 49.0 in May. Economists polled by Reuters were expected an ISM manufacturing reading of 50.7 in May, unchanged from April.
Construction spending rose 0.4 percent, compared to a forecast of a rise of 0.8 percent, and up from a 1.7-percent decline in March.
The Labor Department reported that there were 175,000 new jobs created in May, which was better than expected.
FROM VOLCKER TO BERNANKE – The target range for the short-term fed funds rate is between 0% and 0.25% today. The range was between 19% and 20% in January 1981 (source: Federal Reserve).
Sources: CNBC, MMG, CNN Money, Business Insider, Bloomberg, Housingwire