Mortgage Rates Highest In nearly 10 Months After Employment Data

Transition to normalMortgage rates continued to rise as the result of some of the big-ticket  market moving events markets have been waiting for, such as the stronger than expected Jobless Claims data.  When this morning’s Jobless Claims numbers showed fewer Americans filed for first-time unemployment benefits than expected, interest rates in the secondary market moved higher, along with equities.  The basic philosophy is that a stronger labor market signifies a stronger economy that can support higher stocks prices and interest rates. Mortgage rates vaulted higher at their fastest pace since late January, after the Employment Situation showed an unexpectedly high number of jobs created in February.  The Employment Situation is the most important piece of domestic economic data each month and always has the potential to greatly impact markets.

The economists at Fannie Mae released their first economic forecast of 2013 and introduced their theme for the New Year, “Transition to Normal.”  This theme, they said, has profound implications for a number of longer-term challenges facing the country and reflects the rebound of housing along with the fiscal policy decisions made and yet to be made.  “It is unclear where this transition will lead and what type of economic growth path awaits.  Some have questioned whether the country has entered a prolonged period of below-potential GDP growth, which they label “the new normal.”  Others ask when housing will return to normal.” the forecast says. 

The economists project that the first interest rate hike by the Federal Reserve will not occur until the second half of 2015, so long-term interest rates should increase very gradually over the next few years with the yield on the 10-year Treasury note rising from its current 1.86 percent to 2 percent at the end of 2013 and 2.3 percent at the end of 2014.  Mortgage rates should follow a similar pattern, ending 2013 and 2014 at around 3.8 percent and 4.2 percent, respectively.

It is a great time to buy for many would-be homeowners. The market offers historically low interest rates, as well as affordable home prices. I make it easy from start to finish by educating my customers on the home buying process. Here’s a step-by-step guide to help you find your way through the process of buying a home and securing a loan.

Ready to start looking for your new home?  Apply Online today and get prequalified.  Then you will be ready when you find that dreamy new home!  Let’s get started now!

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Michelle Castle provides mortgage loans to all of North Texas and Southern Oklahoma. Call Michelle Castle at (903) 771-2617 if you are looking for a home loan in North Texas and Southern Oklahoma.  Click here to visit Michelle’s website and apply for a loan.

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