News Affecting Mortgage Rates

This week there is lots of economic news that will affect mortgage rates and the bulk of that news will arrive to us on Friday. So here is quick post on what the items are and how they can affect mortgage rates in Houston, Austin, Dallas, San Antonio and throughout the state of Texas.

The big one when it comes to economic news affecting mortgage rates is the jobs number. Will we continue to add jobs? If so will it exceed the previous month’s growth and most importantly what kind of jobs are they? If the numbers continue to improve that is the one thing that can get the housing market moving again. let me repeat that, no jobs and no housing sector improvement. Jobs is the key driver to a housing recovery.

The consensus is for the unemployment rate to remain at 8.3% for political reasons I expect them to “hit” that number if not improve on it, but that’s another story.

Should an improvement in job creation occur expect mortgage rates to start to rise again. Of course that is predicated on better numbers. If they miss the mark which I feel is highly unlikely, it is the Department of Labor reporting in an election year and they want job security, I think mortgage rates will stay flat.

Other things affecting mortgage rates this week has been the lackluster growth of the global economies. Europe is at ZERO percent growth or basically a recession, China is now in single-digit growth, and we are limping along with sub 2.5% growth. These low growth rates are what caused the stock market to sell-off yesterday and caused mortgage rates to improve slightly.

We rely so much on Europe for our exports that sooner or later it will affect our GDP and job growth, expect these numbers AFTER the election.

So here is the big item to watch for good jobs report higher mortgage rates in the mid-term, lower jobs numbers mortgage rates to stay the same. In the longer term I see the world economy slowing-down which will cause rates some time later this year to retreat.

Remember it’s an election year.



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