Mortgages didn't change significantly during the week ending Thursday, Feb. 2, 2017, according to Freddie Mac's Primary Mortgage Market Survey. The average 30-year fixed-rate mortgage didn't change, and the 15-year fixed-rate mortgage ticked up just one basis point.
According to Freddie Mac:
Two pieces of news that might have influenced mortgage rates came out during the same week, but not early enough to have much of an effect, The Washington Post reported.
The first piece of news was the result of the most recent two-day Federal Reserve meeting, which ended Feb 1. The committee voted to keep interest rates stable after increasing them in December. However, that doesn't mean hikes aren't in store for the year ahead.
"Employment grew by 227,000 jobs during the first month of the year."
"Given the continued improvements in the job market and the increases in inflation, we are holding to our forecast of three Fed rate hikes for 2017, with the first hike most likely coming in June, but [it] could happen as early as their next meeting in March," Michael Fratantoni, the chief economist for the Mortgage Bankers Association, told The Washington Post. "We also expect that Federal Reserve officials will be talking much more in 2017 about tapering or stopping reinvestments, which could lead to wider mortgage-Treasury spreads."
The committee's statement alluded to positive growth in household spending, a strong jobs market and increasing inflation - all indicators that the economy could be healthy enough to handle another Federal funds rate hike.
The second piece of news is the jobs report for January, which was released Friday, Feb. 3. Employment grew by 227,000 jobs during the first month of the year, and unemployment ticked up one percentage point to 4.8%.
Though job growth was lower than it was in December, it was more than economists were anticipating, according to Forbes. The widely held prediction was that approximately 175,000 jobs would be added. The better-than-expected numbers could mean rates have the potential to increase in the coming week.
Additionally, the average hourly earnings went up 3 cents, reaching $26 per hour. This represents an increase of 2.5% compared to last January. Presumably, increases in wages mean more people can invest in a home.
Only 20% of respondents to Bankrate's Rate Trend Index believe the next seven days will see decreases in interest rates. The remaining 80% are evenly split between predictions of stagnant or increasing rates.
People considering a home purchase could benefit from moving sooner rather than later. Home prices tend to tick up once the weather begins to warm up, and these indicators of a strong economy could push mortgage rates higher.
Academy Mortgage is one of the top independent purchase lenders in the country as ranked in the 2015 CoreLogic Marketrac Report. Visit www.academymortgage.com to find a loan, get a rate, or calculate your payment today.