Fed makes another move, mortgage rates creep up
For the third straight week, mortgage rates have crept upward and are now sitting around 3.78% on average for a 30-year fixed-rate loan according to Freddie Mac's weekly survey. That is still well below the 4.86% at this time last year reported by Freddie Mac, which is why companies are still reporting very high volume into October and potentially November.
You might see rates dropping during the next few days, however, as the stock market reacts to a report that Chinese officials have been casting doubt concerning a long-term trade deal with the United States. The Dow dropped 140 points on Thursday while the S&P 500 slipped by 0.3%.
The market is also still reacting to the Federal Reserve's decision to cut overnight lending rates by 25 basis points. This was the third rate cut by the Fed this year and it will likely be the last move by the group in 2019. The language for this rate cut leaned more toward being patient and assessing moves instead of "acting as appropriate to sustain the expansion."
A surprising jobs report this week from the Labor Department pumped some positivity into the market as nonfarm payrolls rose by 128,000 in October despite an ongoing strike at General Motors. Economists expected growth of just 75,000 jobs. The unemployment rate did go back up ever so slightly, from 3.5% to 3.6%. Numbers for August and September were both revised up by 51,000 and 44,000, respectively.
The report also showed that, year-over-year, wages have risen by 3.0% with October's average hourly earnings for employees on private nonfarm payrolls going up by 6 cents to $28.18.
Mortgage applications for a refinance may have dipped slightly last week, but they are still up by an astounding 134% year-over-year. Mortgage purchase applications rose by 2% this week, putting them 10% higher than a year ago at this time.
The latest S&P Case-Shiller home price index shows prices rising by 3.2% in August, up from July's 3.1% growth pace. Of the major metro areas, three cities in the Southeast were the ones to see major appreciation in prices. Charlotte, North Carolina, Tampa, Florida and Atlanta, Georgia saw price increases of 4.5%, 4.3% and 4% respectively.
