Why Rates Jumped – in a Minute
Here is a quick update on what happened last week ending November 18, 2016 in the housing and financial markets.
THE ECONOMY
Mortgage rates rose as markets prepare for expected economic growth and anticipated inflation under the Trump administration. Inflation can bring higher rates.
Federal Chair Janet Yellen’s comments this week support the idea of a Federal policy rate hike in December. Economists almost unanimously agree a hike is coming.
Also supporting a possible Federal policy rate hike, the labor market continues to show strength, and consumer prices recorded their biggest increase in 6 months.
HOUSING NEWS
New housing starts surged to a 9+-year high in October. Construction ramped up for both single-family and multifamily homes, jumping 25.5% since September.
Builders remain optimistic and are planning for a strong finish to the year for housing. Market confidence among builders is at the highest level in 10 years.
The October housing market showed the largest price increase in 10 months. The median home sale price increased 7% year-over-year, and inventory dropped 8%.
Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate are subject to change at any time.
Taken from: Jeremy Schachter from Pinnacle Capital Mortgage