Mortgage Market Update: A Breath of Fresh Air?

Hope you're having a productive week! I wanted to share a quick update on the mortgage market, as there's some interesting movement happening behind the scenes.

Optimistic Indicators

While the headlines might not scream "major rate drop," there's definitely cause for optimism. This past week, despite the Fed holding steady on rates, we've seen some positive indicators influencing mortgage rates. Remember, the Fed's actions don't directly dictate mortgage rates – it's more about market sentiment and long-term economic outlook. ?And right now, the market is seeing some encouraging signs.

Fed says, No Rush to Cut

First off, the Fed's "no rush to cut" stance actually signals confidence in the economy, particularly the strong job market. As we know, job security is a huge driver in the housing market. Plus, lower oil prices are a welcome development, as they can help curb inflation, which in turn is good news for long-term interest rates like mortgages.

Interestingly, even the European Central Bank is cutting rates, which creates global pressure for other central banks, including our Fed, to eventually follow suit. We also saw slower-than-expected economic growth in Q4, which, counterintuitively, is good news for bonds and can help lower rates.

Latest Mortgage Rate Survey

Freddie Mac's latest survey shows the 30-year fixed-rate mortgage trending near 6.95 percent, essentially flat from last week. While it's hovering in that 6-7 percent range, remember that we've seen rates improve after similar periods in the past. And as Matthew Graham pointed out, the bond market, which directly influences mortgage rates, has been volatile but ultimately netting out to little change. This volatility is often driven by daily news cycles, but the underlying trend is what we need to watch.

Looking ahead, all eyes are on this week's jobs report. This data will give us a clearer picture of the employment landscape, which is crucial for predicting future Fed actions and, ultimately, mortgage rate trends.

The bottom line?

While rates haven't plummeted, the overall picture is starting to look more promising. Several factors are aligning to potentially push rates down in the coming weeks. I'm keeping a close eye on the market, and as always, I'm here to answer any questions you have. Whether you're thinking of buying, refinancing, or just want to chat about the market, don't hesitate to reach out. You can simply send me an email or call/text me at 818.307.6072.