Mortgage Rates Weekly Update October 9 2017

(dramatic music) – Welcome to the Mortgage Rates Weekly Market Update for the week of October 9, 2017 Hello, I'm John Thomas with Primary Residential Mortgage

Let me give you an update Well, last week was not kind to mortgage rates Mortgage rates did end the week higher If you take a look at the bond chart on the screen, you can see mortgage bonds hit their high back about September 8th and then the trend had been for them to sell off Hit a floor of support, traded there for a while, then broke through

Hit another floor of support which held the previous week, but this week it looked like it was gonna hold, but then the jobs report came out on Friday and we sold off below that floor of support, moved mortgage interest rates higher Now, on Friday we were able to hit another floor of support and rally back higher just below the previous floor of support which is acting like a ceiling of resistance Since the damage has already been done, we're gonna recommend floating your mortgage rate to start the week to see if bonds can rally back above the previous floor of support, and if they get turned lower, back towards the new floor of support, we're gonna recommend switching quickly to locking But go ahead and start the week floating, see if bonds can build on the recovery that they had on Friday after the sell off Now, if we dig into the economic news, the big report on Friday was the September Jobs Report which showed that we lost 333,000 jobs, which was bad, but what caused the bond market to sell off was in that report was there was wage growth

Hourly earnings were up 5%, well above expectations of 2% and bringing the yearly total to 29% That wage growth is, if that continues, that'll create inflation which is bad news for bonds

That's why we had the bonds sell off even though we had a very bad job report of 33,000 jobs lost Now, also there were revised July's numbers lower, 51,000 jobs to 138,000, but August was revised slightly higher at 13,000 jobs to 169,000 jobs So the jobs report, mixed bag there, lost 33,000 jobs, but we had some big wage growth, which is good for the economy, but bad for mortgage bonds Then we saw weak Initial Jobs Report come out on Thursday, it showed claims drop 12,000 to 260,000 claims for the week Now, that number is still being skewed higher from the hurricanes in Florida and Texas

It will take a couple months for that to weed itself out and to get to an accurate reading of initial jobs claims without the effects of the hurricane In housing news, Corelogic released their Home Price Index for August 2017 It showed home prices were up 69% year over year from August 2016 and they are up 9% from July

So the limited inventories continuing to put an upper price pressure on homes Corelogic's predicting home prices to continue going up They are predicting 47% price increase from August of 2017 to August of 2018 So it's still a good time to buy, you're gonna have price appreciation as we have low inventory to push them higher

But the longer you wait, the higher interest rates could be if the wage growth continues and the higher the home prices are gonna be because we know home prices are gonna continue to be pushed upward So that means get off the fence If you are thinking about buying, get pre-approved Get out there and get under contract And now to help you do that, we have a new down payment program called the PRMI Dream Maker Down Payment Program

It allows people using FHA loans to qualify and get up to 100% financing because Primary Residential Mortgage is gonna provide a second mortgage for the 35% down payment You get your FHA loan for your 965% purchase, so that gives you 100% financing There's a link in the blog to all the details, but basically 620 minimum credit score, no income restrictions

If you are interested in that program, give us a call at 302-703-0727 or you can apply online at delawaremortgageloansnet Now, in the local news, the next First Time Home Buyer's Seminar is Saturday October 21st from 10:00 am to noon in Newark, Delaware at the Christiana Hilton Hotel

You can register for that event and give us a call at 302-703-0727 or online wwwdelawarehomebuyerseminarcom Look forward to seeing you guys next week (dramatic music)

Source: Youtube

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