At the opening this morning, we are experiencing our 3rd day in-a-row of rising rates. What’s up with that? Thankfully, at the moment, they are clawing their way back. Last week, Mortgage rates rose as investors gained confidence in the global economy. China and Europe posted better-than-expected manufacturing rates, U.S. Jobless Claims fell for the second straight week, and the worst of the European debt crisis appears to have passed.
A strengthening economy = Mortgage Rates will go up!
In addition, The Commerce Department released its monthly New Home Sales report; while new home sales for December fell short of Wall Street’s expectations, sales of new homes are almost 20 percent higher than they were one year ago.
Growing demand for homes coupled with lower inventories of available homes suggests that the days of rock-bottom home prices and low mortgage rates are dwindling.
According to Freddie Mac, the average mortgage rate for a 30-year fixed rate loan was 3.42 percent with borrowers paying 0.7 percent in discount points plus closing costs. The average rate for a 15- year fixed rate mortgage was 2.71 percent with borrowers paying 0.7 percent in discount points plus closing costs.
While slight, the week-over-week increase in mortgage rates in Sacramento could become a trend.
Weekly Jobless Claims fell below Wall Street forecasts for the second week in a row. 330,000 new jobless claims were filed; far fewer new claims were filed than the 360,000 new jobless claims expected by investors. New jobless claims also fell below the prior week’s 335,000 new jobless claims. Fewer jobless claims are a sign of a stabilizing economy.
Mortgage rates typically rise as investors gain confidence in the economy and financial markets.
This week’s economic news calendar is jam-packed – Let’s enjoy the ride. If you are in the process of getting pre-qualified for a mortgage, I would do it sooner than later, so your mortgage person has the time to get your file ready to go should you want to lock in a new rate (Purchase or Refinance).