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Weekly Mortgage Update: March 26th 2018

March 27, 2018dillonBlog0

WEEKLY MORTGAGE UPDATE – MARCH 26, 2018

Click here to download the PDF.

FIRST TEAM’S WEEKLY MORTGAGE WATCH (MARCH 25TH, 2018) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:

  • Mortgage rates may be moving back into neutral after last week’s meeting of the Federal Reserve.
  • As expected, the Fed raised its interest rates which had little impact on mortgage rates.
  • The bigger news from the gathering was that the Fed Governors’ predictions continue to show a split on how many rate increases to expect this year. Markets are now betting on only two more rate increases this year.
  • While the economy started 2018 with a bang, it appears to have significantly decelerated, potentially to under 2%. This makes the probability of inflationary flare-ups less likely and could help keep rates flat for a while.
  • However, even if the economy does shift into a lower gear, the potential of a trade war, with China scaling back US Treasury purchases, could push interest rates upward.
  • Final GDP numbers for the last quarter of 2017 are due this week. With the reduced concerns around accelerating growth, a reading of less than 2.2% could help push mortgage rates downward.
  • However, political news could push rates either way, especially if we see more threats of a trade war.

ADULTING IS INHIBITING HOUSING FOR YOUNGER FOLKS

According to the latest from Freddie Mac, the housing market is being held back to some degree by the financial challenges facing younger generations. Since 2000, young adults’ average annual expenditure has climbed by 36%, with both housing and healthcare more than doubling. Add in skyrocketing education costs and debt, coupled with lower labor market participation rates, and young people are having a more challenging time accessing the housing market.

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