The 30-Year Mortgage rates dropped
The drop reaffirms the last 2-month new falling tendency since the peaks reached during Oct-Nov 2018. There’s still risk associated with the new year and nobody can assure if the mortgage rates will continue their fall down or start moving up.
We need to remember that the peak FHA mortgage rate was 4.62% on Oct 05 and the peak Conventional mortgage rate reached 5.05% on Nov 05. The Jumbo mortgage rate peak was 4.81% on May 15.
Today, the excellent December Jobs Report ignited a stock market rally and bond market selloff causing the mortgage rates to erase yesterday’s drop. The jobs report is universally considered to be the most important of the monthly economic data.
From here, it remains to be seen how much higher rates need to go before markets feel like they’ve seen a sufficient correction, but it would be a pleasant and unlikely surprise if it was a one-day affair. Translation: there’s a very real risk that rates could move higher before they move lower.
CoreLogic’s chief economic Frank Nothaft is expecting, in his January Economic Outlook, mortgage rates to reach their highest levels in a decade this year, affecting home buyers’ monthly payments and lessening the impact of new conforming loan limits.
It is hard to say in the next days if this is the end of dropping rates or just a momentary pause. I recommend to all home buyers to lock their home loan rates if they are planning to close escrow within 45 days.