|Good news! The employment numbers for March came out strong today. The unemployment rate dropped too. All of this underscores the fact that the economy is doing better. Combine this with the Core PCE index, the Fed’s measure of inflation, coming in at an annualized rate of 2.4% and you have definite upward pressure on rates.
Yes, the Case-Schiller Index came out showing a net drop in the average price of homes in the top 20 cities. Even though pricing is a LOCAL issue (remember don’t paint OKC with a Detroit housing number), let’s assume that buyers listen to this stuff and think the value of the house they buy today will be worth 2.5% less next year….so they want to wait.
Here is what the buyer needs to know: “Yes I KNOW you’re concerned, but rates ARE going up because the economy is doing better – just look at the job numbers. Even IF your home value drops 2.5% next year, do you know how much LESS home you could buy for the same monthly payment if you wait and rates jump up 1%. – because that’s what they did in December? 10%! So, on a $200,000 home, you might save $5,000 by waiting a year, but you’d LOOSE $20,000 in buyer power due to higher rates…not to mention the tax benefits! WAKE UP and SIGN!”
This week Freddie Mac’s 30 yr. fixed rate survey ranged between 4.75% and 4.875% depending on program, credit and points.
Senior Loan Officer
Senior Loan Consultant
NMLSR # 217991
OK License # MLO01963
Office: 405-341-8644 x 102
WR Starkey Mortgage, LLP NMLSR # 2146