Weekly Mortgage Rate Update-12-10-24

Weekly Mortgage Rates

December 10, 2024

Another week of rate improvements, have we turned the corner?

Rates have been improving since Thanksgiving week.  The move hasn’t been huge, but incrementally it is starting to add up. We begin this week though a little higher than the best pricing seen Friday as markets brace for inflation readings tomorrow.

It’s all about inflation this week

Why does inflation matter so much to the direction of rates?  Inflation erodes value on long term investments like a 30-year mortgage bond, which is a fixed rate investment.  If expected to continue increasing, rates will need to remain elevated to offset the loss of value. So, tomorrow’s CPI report is important and is the last major report before the Fed meeting next week as well. The expectation is that it is still rising at a moderate pace.  We need it to come in lower than expectations to see any follow through to lower rates.  If higher than expectations, we are going to lose our recent improvements.

The job market is losing steam

There was a mix of data on employment to parse through last week.  If you just looked at the headline number, it looks strong with November showing 227k jobs added for the month. A good sign after October hirings slowed to just 12k.  The October slowdown was attributed to the hurricanes and strikes though, and the rebound was expected.  Contradicting the strong headline number, the unemployment rate moved up from 4.1% to 4.2%. The unemployment rate comes from a household survey not the same establishment survey that the hirings come from, and it paints a completely different picture. The household survey shows unemployment increased by 161,000 and that 193,000 exited the labor force and are no longer looking for work. Overall, the weakness was noted with a slight improvement in mortgage rates on Friday.

There is at least a potential for lower rates ahead

Which is more than we could say just a few weeks ago.  After the jobs data on Friday, rates tried to improve but keep getting pulled back. The 10 year Note that is our bellwether has tried to break below 4.20% but hasn’t been able to hold below that.  We have spent a couple sessions under it but only to come back up to this level. At the the moment, its up to 4.24% ahead of the key inflation report tomorrow.

This Week’s Rates

Loan Type	Conventional 30 year	JUMBO 30 Year	FHA 30 year	VA 30 Year
Interest rate	6.50%	6.875%	5.875%	5.99%
APR	6.664%*	6.99%**	6.891%***	6.137%****

LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)

RATES ARE CURRENT AS OF 12-10-2024.  SUBJECT TO BORROWER APPROVAL, FICO SCORE, LTV AND PROPERTY TYPE

*APR IS BASED ON ESTIMATED FINANCE CHARGES OF $6935

**APR BASED ON ESTIMATED FINANCE CHARGES OF $16,430

***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,  $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.