Mortgage Interest Rate Update
Categories: Front Page, Mortgage News, Real Estate News
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As of 10:00 a.m Friday December 7th conforming 30 year fixed rates were about 5.75% with no points, by Friday afternoon they had jumped to 6.00% a full .25% higher! Why you ask….The jobs report numbers on Friday morning were relatively tame however unemployment remained at a low 4.7% and hourly earnings up .5%, a bit higher than anticipated, both of which are inflationary indicators and inflation is bad for bonds and mortgage interest rates. Prior to Friday’s job’s numbers the bond prices had risen to a level unseen for almost 2 years and were just looking for a reason to reverse. Remember as the price of the bond goes down the yield goes up and as goes the yield go interest rates.
On Tuesday the 11th the Fed will announce their decision on short term interest rates at 2:15 pm Eastern Time. The expectations are for a .25% cut which would put Prime rate at 7.25%. Again a reduction in the Fed funds rate loosens the money supply which can jump start inflation and therefore we may see mortgage interest rates to increase by another .125% by weeks end. As a result I remain in a locking bias until further notice.
