Lots to unpack in this update to help you understand what’s happening globally and how it trickles down to affect the mortgage rate you could be paying on your next home finance or refinance. As you know, the Russian-Ukrainian conflict continues and looks to be escalating. The stock market doesn’t like the geo-political uncertainty, especially as it involves resource-rich Ukraine. Investor funds are moving to the safety of the bond market, which has helped mortgage rates improve.
But, we know this improvement and investors moving to bonds is likely short-term, but according to my sources, the current trend for rates this week is slightly lower. We know, however, that inflation remains a major concern, and worries about the Fed’s next steps to curb inflation – especially considering the geopolitical climate – could temper the amount of improvement we could see in rates.
And, not to mention, it’s Jobs Week with lots of important employment data being released beginning on Wednesday with ADP’s estimate on private-sector job creation. The consensus forecast for ADP’s February estimate is a 320,000 rise in private payrolls. Looking back at January, ADP’s estimate for a sharp fall of 301,000 was, for a second month in a row, way off target. The actual result was growth of 444,000.
As for the government’s Jobs Report, we are anticipating a 390,000 rise in new job creation in February which in January, at 467,000, far surpassed the high estimate. Average hourly earnings – also known as wage inflation – which in January also far surpassed expectations at a monthly 0.7 percent gain for an annual 5.7 percent rate, are expected to show continued pressure, at 0.5 and 5.8 percent respectively.
Continued inflation pressure in wages could create greater volatility in mortgage rates to end the week, we’ll have to wait and see.
The housing market continues to be a bright spot in the economic picture. Despite pending and new sales a bit below estimates and home buying activity a little slower, we have to remember that inventory dropped 34% in the past year, home prices are up considerably, and rates have risen about a percentage over the last year and the housing market remains strong. To me, this looks like a resilient market and a great place to be.
So, knowing that, it’s time to lock your rate in if you’ve been holding off. Rates are down quite a bit from the last few weeks. Also, now is a great time to make sure you have access to the equity in your home to support your financial goals this year. Reach out to me to talk about how by simply replying to this email or call/text me at 818.307.6072.
P.S. We have an exciting announcement!! We are expanding and are now fully licensed and have opened a branch in Colorado. As you may know, Colorado is where I was born and raised so my roots there are deep and we are so excited to now be able to offer full-service home financing in my home state! So, please spread the word to your friends and family and as always you can reach me on my website (www.pacfimortgage.com), or by calling/texting 818.307.6072, or replying to this email. I look forward to serving you in Colorado!
