Weekly Mortgage Rate Update- 10-08-2024
They say hindsight is 20/20. So, for those clients who want to wait for rates to come down, that day was September 16th, 2024. This marked the best rate since May 2023 and for the year so far. Right now, rates are almost 1% higher than that day.
Yes, the best rate was 2 days before the September 18th Fed meeting. Since then, rates have been under pressure and have been slowly worsening as reports are showing the economy, while not robust is still plugging along and the unemployment filings are a little better than they were over the summer. Last week we talked about the headwinds for rates with events that could be inflationary. Like rising oil prices. Lower oil prices had been helping to bring down costs, this is now going the other way. Last week ISM Services (represents most of the economy) showed expansion above estimates and the prices paid component showed costs rising. Both an expanding economy and increased prices doesn’t help our rate outlook and rates change when the outlook changes.
But the really shift in rates came on Friday after the BLS government data surprised to the upside. Reporting over 100k more jobs added to the economy than anticipated, and the unemployment rate ticked down to 4.1%. Also, revisions to July and August numbers added 72k more jobs than previously reported.
Remembering that the catalyst that started rate improvements was the July Jobs report on August 2nd that showed a huge decrease in jobs added and the unemployment increased to 4.3%. Followed by the revisions that showed the BLS has overstated jobs by the most since 2009. The most recent report has erased all the improvements from that July reading. The Fed, including Powell know this report is severely flawed and have made this clear in recent comments. But even when they discount the report by whatever percentage of error, they still look at this reading as showing the employment sector is doing ok, combined with other reports that show it’s just not that dire.
This week we get the CPI inflation reading on Thursday and there are a lot of Fed members out speaking this week. Will be interesting to see if they try to walk the market back on the recent jobs data or lean into it as a reason to slow rate cuts. On the technical side of things, it doesn’t look great. The 10 year shot above 4% and we hope it finds some footing here so that rates don’t continue to worsen. We are a good .50% higher on rates than we were quoting before Friday. If you have clients shopping, they need to review their numbers again with the recent developments.
|
Loan Type |
Conventional 30 year |
Conventional 15 year |
FHA 30 year |
VA 30 Year |
|
Interest rate |
6.50% |
5.875% |
5.625% |
5.895% |
|
APR |
6.658%* |
6.131%* |
6.641%** |
5.615%*** |
LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)
RATES ARE CURRENT AS OF 10-08-2024. SUBJECT TO BORROWER APPROVAL, FICO SCORE, LTV AND PROPERTY TYPE
*APR IS BASED ON ESTIMATED FINANCE CHARGES OF $6935
**APR IS BASED ON ESTIMATED FINANCE CHARGS OF $10,969 THIS INCLUDES FHA MORTGAGE INSURA
NCE PREMIUM
***APR BASED ON ESTIMATED FINANCE CHARGES OF $8343
FEES INCLUDE 1% POINTS, NO Loan Origination Fee , $1095 PROCESSING AND $0 UNDERWRITING FEE
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.