Mortgage rates tend to get “interesting” during the end of the year. 2014 will not disappoint. Many think this is an end of the year phenomenon but I assure you, there is reason this happens. The 2 primary factors playing into a slippery holiday mortgage environment this holiday season are:
- New Jobs/Unemployment data – right now (as of Friday) that data is positive showing job growth
- Thin trading – when we get closer to the actual holiday there is less volume which means markets can swing either way much more quickly and effortlessly
Last Friday we saw mortgage rates increase .25% (on a 30 year fixed mortgage) on the heels of positive job growth data (the old bad news is good news dynamic). On Monday, we saw a complete reversal in the mortgage rate market and rates went back down by .25% (on a 30 year fixed mortgage) as investors fled the stock market for the safety/security bonds provide. It is expected that mortgage rates will be volatile through the end of the year. Our float down rate lock eliminates the guesswork of trying to lock at the perfect time!
Longer Term Mortgage Rate Outlook
Going forward, longer term we can expect mortgage rates to drift upward if the economy continues to statistically improve as it has recently. The general opposite is true if the economy starts to show signs of weakness. Remember too that the Fed has vowed to step back in if they feel rates are increasing too far too fast to try to keep the housing market healthy. I will be sure to keep you posted as this rate market continues so skate across the pond like an awkward teenager on ice skates for the first time.
By Jeremy House