Fed tests the markets by continuing rate hike path
Mortgage rate trends:
Rates continue to follow a newly defined trading channel established at the beginning of October and are holding for now *UPDATE* As I get ready to hit the send button on this email, I am getting an alert to lock…Rates reacting to stock market volatility for the past few weeks and it just turned negative again for stocks, causing rates to rise. Stocks started the morning up 100 points and at this moment, its down 125 points. Stay tuned and see how it closes this afternoon.
Today, the much anticipated October jobs data was released showing 250,000 jobs added in October, unemployment at 3.7%. Those are the headlines; the real piece of information we were waiting for was average hourly wages, which came in at 3.1% higher for October. The average hourly wage is currently $27.30 per hour. Are you earning the national average hourly wage?
Overall the economic news supports the Fed’s continuing a path of gradual rate hikes as the Fed Chair says we are “a long way” from neutral. Current outlook for Fed rate hike in December is a 72.1% chance of an increase. Not expecting much to change with rates until after the Mid-Term election results; bond traders waiting to see how the balance of power is affected. Stocks not liking the current direction of rates, as we can see from the increased volatility in the markets.
Check out these rates we have negotiated with our lending partners!*
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Conventional 30 year fixed |
4.875% 4.949% APR |
No Points/No origination |
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FHA 30 year fixed |
6.089% APR |
No Points/No origination |
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VA 30 year fixed |
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No Points/No origination |
Housing news: Could robots be the answer to our housing supply/cost issues?
This is a direct excerpt from the Rob Chrisman report this morning:**
Companies like Modular Home Builder or Baltimore's Blueprint Robotics Inc. are attracting attention. Houses are built on an assembly line, using robots that fire thousands of nails into studs each day without missing. Other machines cut, sand, drill, and insulate. These factories are filling in for a shortage of skilled workers that's crimped construction of residences across the country. Weather isn't a factor, houses are constructed off-site for less money, and in a fraction of the time. These aren't trailer homes, or Sears' kit homes from the early 1900s. Builders and developers use the modular factories as subcontractors to produce homes in sections, which are then assembled on-site by local laborers like Legos. There are transportation costs and hassles to be considered, and possible restrictions on size loads on highways. But the technique is gaining in popularity.
*Rates subject to change, this is not a commitment to lend.
Conventional scenario based on a 250,000 purchase price with 20% down and 740 fico. FHA scenario based on 250,000 with 3.5% down and 740 fico and VA scenario based on 250,000 with 0% down and 740 fico.
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* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.