This week, mortgage rates have taken a breather and have effectively stayed flat, according to the latest survey of average mortgage rates published by Freddie Mac. After last week’s volatility and further volatility expected later this week with the release of the latest Jobs Report, this is a welcome respite.
The housing market continues to show up strong as we saw data on appreciation rates remain strong, new home and existing home sales remain robust even in the face of rising mortgage rates and low inventory levels.
And speaking of strong rates of appreciation, I want to remind you that now is an ideal time to put a Home Equity Line of Credit (HELOC) in place for use in case of an emergency or to finance large projects, like remodeling your home. We’ve all heard personal finance experts recommend that we have 6 months of expenses in an “emergency fund.” However, few households actually have this much available in liquid savings to use in the case of unexpected large expenses. Do you? If not, now is a great time to put a HELOC in place and I can help you do that. Reach out and we can discuss what it would look like for you.
As for the rest of the week, there’s lots of important data coming out, leading up to Friday’s Monthly Jobs Report.
Next up on Wednesday is the ADP Employment Report on private job sector job creation. The consensus forecast for January estimate is 225,000. Looking back at December, ADP’s estimate for a sharp rise to 807,000 in private payroll growth was well wide of the mark. The actual result was sharp slowing to 211,000.
A 200,000 rise is the consensus for job creation growth in January which in December, at 199,000, missed low-end expectations for a second straight month. Average hourly earnings are expected to rise a substantial 0.5 percent on the month and 5 tenths on the year to 5.2 percent.
The unemployment rate is expected to remain steady at 3.9 percent. Traders will be closely watching the rate of wage inflation. As we know, inflation rates have risen to near 40-year highs, which is what has been one of the drivers of mortgage rates rising as well. Wage inflation could also cause further volatility in mortgage rates to end the week.
I’ll be keeping an eye on it all and report back next week!
