Rates Rise Has Slowed but Continue in a Volatile Trend…

Today’s update is a combo of good news and bad news. Which do you like first? I prefer the good news first, so here it goes…mortgage rates have taken a breather from their robust rise and we’ve even seen momentary improvements. Overall though, it’s no surprise that rates are higher than last year at this time. However, as a result, we’re seeing some normalization of the housing market, which is a welcome development for homebuyers that have been on the fence waiting for the market to even out. According to Freddie Mac, the homebuyer pool has shrunken, the supply of homes for sale is rising and the tightness of the market is easing up.

Now for the bad news…rumblings continue among market watchers about recession, if and when one is going to happen. Now, let’s be clear, markets are cyclical – they always have been, always will be – so technically, a recession is always on the horizon, unless you’re already in one. The more helpful question is how can you position yourself and your finances so that you minimize the impacts of recession and protect or even profit from an economic downturn?

My two cents would be to consider the following:

• The housing market and real estate, in general, are expected to remain strong thanks to demographics, so it can be a great time to be owning a home and/or investment real estate.

• Use the equity in your home to pay off higher-interest debt and improve your family’s financial strength. If you have that ‘drowning’ feeling when you think about your high-interest debt load you may want to consider paying it down by refinancing and accessing the equity in your home

• If you or a loved one are at least 55 years old and feel “house rich but cash poor”, we’ve been seeing a lot of interest in reverse mortgages to help individuals of retirement age get their finances in order, pay off debt, and get rid of their monthly mortgage payment in anticipation for what’s to come. Let me know if this is something you think would be good for you or your loved ones and let’s discuss your options.

If you’d like to discuss your options when it comes to using home financing to shore up your financial situation, let’s talk and take a look at your various options.

As for what I’m watching this week…

Last Friday’s monthly jobs report came out showing that the employment picture is looking stronger than expected and wage inflation. Both stocks and bonds were lower on the news and offered a minor and temporary improvement in mortgage rates.

As for this week, there are really no high-impact reports on the schedule until later this week when we get some inflation news and consumer data. In the absence of much data, the trend for rates to be bouncing around sideways is likely to continue.

On Friday we get a look at the inflation rate for consumer prices. Not surprisingly prices are expected to climb 0.7 percent on the month versus 0.3 percent in April, yet the year-over-year rate is seen 1 tenth lower at 8.2 percent versus 8.3 percent. percent on the month, a little less heated than 0.6 percent in April which was much higher than expected; this yearly rate is seen at 5.9 versus 6.2 percent. Any surprises here are likely to spark some additional volatility in rates to close out the week.