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October 4, 2024
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October 4, 2024

Here We Go... Again?

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Are rates going higher?? Mortgage rates jumped to over 6.5% today due to a strong BLS (Bureau of Labor Statistics) jobs report, which came in much higher than expected at 254,000 new jobs. The household survey, which is also part of the report, showed even higher numbers.

In general, more jobs signal a stronger economy. A better economy can lead to inflation, and mortgage rates tend to rise when there's inflation and job growth.

The BLS has been unreliable in recent months, often revising job numbers downward. However, this report showed upward revisions for the last two months. The unemployment rate also dropped from 4.2% to 4.1%, another positive sign for the economy.

How real is this? It's unclear, but digging a little deeper into the report reveals some interesting details:

The BLS household survey reported more job creation than the headline number, but nearly 55% of these jobs were for 16- to 19-year-olds, likely not the highest-paying positions. It could be that seasonal jobs are already starting to play a role.

Additionally, the average workweek—the number of hours worked per week—declined again, as employers try to hold onto employees in hopes that things will improve in 2025. They don't want to let workers go after investing in training to get them up to speed.

But the economy may still be on the edge. Inflation has eaten away at everyone’s paychecks and purchasing power. Consumers are increasingly relying on credit cards to make ends meet.

How long can this last? Will there come a point when they simply can’t access any more credit?

But don’t panic. Mortgage rates won’t drop in a straight line. They will still go down into 2025.

On a "bad" day like today, Wall Street likes to take advantage of volatility in the markets. Some of the trading is technical, aimed at finding profits. Rates had been dropping steadily for the past four months, so a day like today was inevitable. Plus, Wall Street wants to cover all their positions before the weekend to avoid being caught on the wrong side.

One more interesting note: Fed Chairman Jerome Powell made strong comments about the economy earlier in the week, prior to the release of the BLS report. This was a shift from his previous remarks. The question is, was he aware of the BLS jobs report before its release? Maybe more attention should be paid to what Powell says—he probably knows more than most.

On the real estate side, inventory keeps rising, offering more options for buyers. Good properties are still selling quickly, while those that have been sitting for a while are offering seller-paid closing costs to move them. It’s definitely a win for buyers.

This is still a great time to buy a home—more options and possibly some seller incentives. Buyer demand remains strong, and many are waiting to get through the election and the Thanksgiving and Christmas holidays.

Then, come January 1st, watch out! 2025 will likely be an incredible year for real estate.

Video Transcript for
Here We Go... Again?
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Featuring:
Bill Gaylord
, NMLS
680603
|
Gaylord-Hansen Team at CrossCountry Mortgage

The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.

Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).

Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.

For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.

Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.

Mortgage News Daily (MND) is a trademark of Brown House Media, Inc. Zillow is a trademark of Zillow, Inc. CrossCountry Mortgage has not been authorized, sponsored, or otherwise approved by Brown House Media, Inc. or Zillow, Inc.

Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.

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