Last week, mortgage rates remained rather steady. And according to the latest survey published by Freddie Mac, the average fixed rates remain below 3 percent, continuing to offer opportunities to refinance or purchase.
However, there may be changes happening on the horizon that we need to be aware of. As we all know, inventory of homes remains a challenge, which is pushing home prices higher. Huge spending programs planned by the government and the bond buying by the Fed risk pushing inflation higher, which in turn will urge mortgage rates higher in the coming months.
What this means for you is that if you have yet to refinance in the last year, it’s time to get a move on and get that done to save money on interest and lower your monthly payment or take cash out to pay down higher interest debt.
If you are looking to buy, it’s likely to get tougher before it gets easier as builders struggle to build enough homes to meet demand, even as lumber prices continue to rise. So, let’s make sure you are pre-approved and ready to jump on an opportunity when you find one.
As for what I’m watching this week…
It’s Jobs Week and the parade of employment reports starts Wednesday with the ADP report on private sector job creation. The consensus forecast for ADP’s April estimate is 763,000.
Then on Friday we get the government’s official job creation numbers. A greater surge of 938,000 is the consensus for April’s job creation number following March’s higher-than-expected surge of 916,000. Payrolls have exceeded expectations significantly in the last two reports.
The unemployment rate is predicted to drop from 6.0 percent to 5.8 percent with the workforce participation rate rising slightly from 61.5 to 61.6 percent.
Average hourly earnings or wage inflation is expected to remain steady. This would be good news for mortgage rates which can be pushed higher when wage inflation is apparent.
I’ll be keeping an eye on it all and reporting back. In the meantime, reach out if you have any questions!