Early 2023 sparks optimism in the mortgage industry federal Reserve The federal funds rate hike could be stopped sooner than later. Mortgage rates also fell by about 30 basis points in January, to the lowest level since September 2022.
Thank you for reading this post, don't forget to subscribe!But February brought a dose of reality back to the markets. on February 3 Bureau of Labor Statistics The report shows that total non-farm payroll employment increased by 517,000 in January, more than expected.
And, this week, Fed Chairman Jerome Powell said there is still a “long way to go” as we are in the “very early stages of deflation.”
Powell said at the Economic Club of Washington, “If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we will have to do more and raise rates.” Will be.” DC
It was enough to send mortgage rates rising again.
latest Freddie Mac The survey shows the 30-year fixed-rate mortgage at 6.12% as of February 9 – three basis points higher than last week. The survey includes borrowers with excellent credit and traditional, conforming purchase loans with 20% down payments.
But other indices revealed even higher rates. According to mortgage news dailyThe 30-year fixed rate was 6.42% on Thursday afternoon. In the HousingWire Mortgage Rates Center, the optimum blue The data — which tracks actual lock rates consumers use with 35% of all mortgage transactions nationwide — showed rates on Wednesday at 6.29%.
“Mortgage rates edged up slightly this week, following an interest rate hike from the Federal Reserve and a surprisingly strong jobs report,” Sam Khater, chief economist at Freddie Mac, said in a statement. “The 30-year fixed rate is hovering near 6%, and interested homebuyers are making it easy to get back in the market just in time for the spring homebuying season.”
a year of mortgage rate volatility
Mortgage industry observers and executives expect 2023 to be a year of stress and volatility until a path to recovery is found. To navigate the challenging landscape, several companies have announced merger and acquisition transactions. Many have also employed additional rounds of layoffs to cut costs.
“We’ve seen the Federal Reserve raise rates seven times for a total of 425 basis points,” said New York-based chairman and CEO Michael Nirenberg. Rhythm Capitalsaid during a call with analysts on Wednesday.
Looking ahead, Nirenberg said 2023 will be “tough” but is close to “being done” with Fed rate hikes. “I think you’ll see a lot more volatility in the market this year. We’ll continue to monitor rate changes.”
The tension between expectations and economic data will pervade financial markets for several more months, according to George Ratiu, Realtor.com’s manager of economic research. As a result, mortgage rates are likely to move up and down in a narrow range for the next few weeks.
“For housing markets, current rates remain a significant barrier to affordability, especially for first-time home buyers. At the same time, there are a number of undercurrents that continue to reshape market dynamics,” Ratiu he said.
