Home Loan Rates Jump on Hopes of Rebounding Economy
Home loan rates jumped higher over the last week as hopes of a rebounding economy start to appear on the horizon. The rosy economic outlook has helped the stock market rally to its highest levels in 5 years has force home loan rates and mortgage bonds to see their worst levels in recent months.
Rebounding Economy = Rebounding Home Loan Rates and Home Prices
A rebounding economy isn’t great news for everyone. Prospective home buyers have started to see their potential monthly mortgage payments increase. Home loan rates have jumped from as much as .25 – .375%, raising monthly payment costs by close to 10% in some cases. As the economy starts to establish a footing to rebound and grow, expect home loan rates, home prices, and home payments to increase as well.
The rebound in the economy could be a false alarm, only time will tell. In the mean time, the hopes and rally behind a growing economy are based off some recent reports.
- Strengthening Job Market – Lowest initial jobless claims in 5 years
- Brightened global economic outlook based on Germany’s increasing growth
- Stocks rally to 5 year highs
Stocks Rally and Home Loan Rates Suffer
Home loan rates have been rising as investors shift their money out of Bonds and treasuries to the stock market. Currently the stock market is at the best level in years, but mortgage bonds have suffered and broken through key resistance at the 200 day moving average. The breakdown of this technical level coupled with the rising stock market have driven mortgage bonds drastically lower, providing a reminder of how quickly home loan rates can rise.
Time Is Running Out for Historic Home Affordability
Despite a recent uptick in home loan rates and home values, owning a home in Dallas and around the country is more affordable than ever. If you or a someone you know has goals to own to pursue your dream home by creating a plan. Find out what you can afford. We are happy to be a resource and invite you to complete a Home Purchase Review to help guide you in the right direction.