I never like to be the bearer of bad news. Well, I have good news and bad news. The good news: the June jobs report showed job creation was better than expected. The bad news? It affects mortgage rates.
Why does the jobs report affect mortgage rates? It is confusing, but was put perfectly in an article I read today (link below):
"The connection between mortgage rates and job creation is the Federal Reserve. That is, as the labor market picks up, the central bank will begin to reduce its support for the economy. And because its support for the economy consists, in large part, of bond purchases, its retreat will result in higher interest rates."
So, as predicted, the damage from the Jobs report has been done. The trend for interest rates is up, although based upon most predictions we are at the high end of where rates will be for 2013. They should remain constant in a .25% trading range for the rest of the year.
That being said, inventory is shrinking and if you want a great house you are going to have to be ready and able when it comes on the market. Get pre-approved and be prepared to offer full price. Getting houses on a discount will not work in this market unless the house has been for sale for over 30 days.
Please feel free to contact me if you have questions, or to find out how you can get pre-approved.
All the best,
Chris
Your Residential Lending Team
http://www.fool.com/investing/general/2013/07/06/fridays-catastrophic-surge-in-mortgage-rates.aspx
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