GOOD NEWS FOR THE ECONOMY - Bad News For Mortgage Interest Rates?
OFTEN TIMES, GOOD ECONOMIC NEWS RESULTS IN NOT-SO-GOOD OUTCOMES - IMPROVED UNEMPLOYMENT NUMBERS DRIVE UP RATES!
This *&^%($#@#@*&* Recession! When will it be over?
Man, I long for the days of EZ Mortgage Loans, Low Inflation, High Employment, and Skyrocketing Home Values!
Well, it seems, even encouraging news creates ripples - disturbing ripples - across other key areas of the economy.
As reported in last Friday's Wall Street Journal, the May Unemployment Report, released last week, showed that the U.S. Economy lost few jobs than experts originally expected. Hooray!
But the encouraging news factored into increasing the yields on U.S. 10-Year Treasury Bonds, which in turn drives up average Mortgage Interest Rates! For the week ending June 11th, the Average 30-Year Fixed Rate Mortgage jumped 0.30% - to 5.59%. Overall, that represents a 5.7% increase in the average rate in only one week!
Although today's average rates are considerably below the 6.32% level of a year ago, fewer borrowers qualify for the best rates today, as loan underwriting standards have tightened considerably over the past 12 months. Indeed, these higher rates, although quite reasonable by historic standards, may keep some on-the-fence potential homebuyers right where they are, as they feel mortgage rates are not as favorable to them now.
The mortgage rate increases have already had a dampening effect on refinancing of existing mortgages. Many current homeowners no longer see monetary advantage to refinancing their home loans at today's higher interest rates.
DEAN MOSS & DEAN'S TEAM CHICAGO
