Mortgage Rates Set To Increase
June 7, 2015
Mortgage rates are still low, although last Friday’s release of data from the Bureau of Labor Statistics showing a 280,000 increase in jobs caused a bond selloff earlier this week that ticked interest rates up. At 3.87%, average interest rates are still near 50-year lows. See Historical Mortgage Rates
According to expert Nick Siebert, at Selected Loans, “The stronger-than expected NFP data also bolstered speculation among investors that the Fed may raise short-term interest rates earlier than expected. However, we believe the Fed wants to see a series of positive economic data going forward, before making a decision on the timing of a rate hike. The U.S. central bank repeatedly said, that its on track to hike rates this year, but ultimately the incoming economic data will determine the timing of a lift in short-term interest rates. Currently, the consensus expectation is that the rate hike will kick off in September”
If memory serves, we have been hearing the same mantra for the last few years, namely that the Fed will introduce a rate hike sometime in the next two sessions.
According to the article “IMF Urges Fed to Wait on Interest Rates Until 2016”, the Wall Street journal writes that the IMF believes the US growth rate will slow to 2.5% requiring a continuation of easy money to counteract the surge in the strength of the US dollar which is damping growth and job creation.
Whomever you believe to be the oracle into future interest rates, it looks safe to say that we’ll be at least safe until September.
If you’re looking to buy a house, especially at the upper price levels, now is the time to get the process started. The combination of low prices and easy money will definitely start to tighten by the end of the year.