RATE MOVEMENT (from prior week) *** UP ***
Unfortunately the upward pressure on mortgage rates continued last week. The weekly average for a 30yr. fixed mortgage is the highest since May of 2017!
IMPORTANT ECONOMIC FACTORS:
Housing Starts – Thursday’s report on housing starts was certainly disappointing, but a look below the surface indicates that it was not as bad as the headline figures suggest. In December, single-family housing starts declined 12% from November (which was far below the consensus forecast). Single-family starts also are strongly influenced by the weather, and December saw particularly bad weather conditions in many parts of the country. Despite the drop at the end of the year, single-family starts in 2017 were 9% higher than in 2016. Another reason for optimism is that building permits for single-family homes, a leading indicator of future housing starts, increased in December.
Federal Government is Shut Down! It’s not clear what effect a government shutdown would have on mortgage rates, but it would not be good for the mortgage industry in many ways. One example, lenders would be unable to obtain case numbers to originate FHA loans. In addition, lenders are required to verify tax return information provided by borrowers with the IRS and verify social security numbers with the Social Security Administration. Delays in providing these services would postpone many loan closings.
Some experts are stating that long term fixed rates in the “3’s” are going to be in the rear view mirror soon, and we may not see rates like this for a long time. Inflation is building, which is the “kiss of death” for interest rates and continued strong economic factors are also applying pressure on rates.
All of the signs are pointing to NOW being the time to make real estate decisions, especially in regards to financing. If any of your clients have been on the fence, this is great information to share.
SVP, Regional Manager
THE CRAWFORD TEAM
V.I.P. Mortgage, Inc.