Mortgage Rate and Market Recap for the Week of November 3rd -11th, 2008
Unemployment Is On the Rise
Last week, the big stinker was the unemployment report. Nationally, the US unemployment rose to 6.5% (previously 6.1%!). Most economists expect this number to get much worse before it gets better. I’d unfortunately have to agree.
When it comes to mortgage rates and this type of news, normally the uglier the news, the better it is for mortgage rates. With this report, I personally think that traders were expecting it to come in higher than estimates. That is why the mortgage market didn’t have a stellar day (It wasn’t that bad either…) on Friday when the report was released.
Inflation Remains a Concern
This is a personal opinion, but I think most traders are thinking about the value of their money. Yes, there’s declining oil prices – you can make an arguement either way. But seriously, with a prime rate of 1%, the bubble is being created. This is why I think mortgage rates will continue to increase in the (long term) future.
Remember, mortgage rates tend to increase when the Fed cuts because of inflation.
Specifically, What Did Those Reports Say?
Each week, I put up an economic calendar of news coming out that following week. Here’s the what actually happened with those reports last week:
What Impacts Mortgage Rates?
If you’re looking to purchase or refinance a home, it’s important to know what moves mortgage rates. There are normally two major things that impact the direction:
- Economic News. (Like the calendar above).
- International News. (major events, pending legislation, war related news, etc).
- Stock Market. (Money flows from equities (stocks) to bonds when it seeks shelter).
What Are Rates Based On?
It’s been mentioned before, but as a common reminder – mortgage rates are only based on one thing. Mortgage Backed Securities (MBS). The only way you have access to these is through live bond quotes.
Looking For Mortgage Rates?
If you’re looking for specifically what mortgage rates are doing, I’d be happy to help with a custom rate quote. Each scenario is different (there are 27 different factors a mortgage rate is determined by). If you or someone you currently know are looking for a mortgage, I’m here to help!
Information without obligation. That’s my policy. If you like what you hear, my team would love to help!
