Weekly Mortgage Update: March 7th, 2018
FIRST TEAM’S WEEKLY MORTGAGE WATCH (MARCH 4TH, 2018) THIS WEEK HIGHLIGHTS THE FOLLOWING UPDATES:
- While rates stepped higher again last week, they spent part of the week looking as if they might drive even further upward.
- In his first testimony to Congress, the new Fed Chair, Jay Powell, expressed that he is increasingly optimistic that the US economy will continue to experience strong growth, and that he is confident that inflation will hit the Fed’s target level relatively soon.
- Coupling this with a strong reading from the ISM Manufacturing Index, and Consumer Confidence returning to levels not seen since 2000, rates could have moved even higher.
- However, comments from the President about the potential of starting a trade war dampened market enthusiasm in both stocks and bonds.
- This week could end up focused on the potential for a trade war. The likely result of one could be higher prices.
- As markets are already concerned about inflation, the more aggressive stance that the US takes against imports, the more likely that rates may rise. However, if the details are less aggressive than feared, rates might retreat. Of course, a strong employment report could change that.
HOME PRICES PASS HISTORIC PEAK LEVELS
In the third quarter of last year, average home prices passed their peak level from 2006. The Great Recession saw home prices across the nation fall by an average 33%. However, the rebound is not evenly distributed. Illinois, Nevada, Florida, and Arizona still remain below their historic highs, and almost 2.5 million homes are still underwater. Other states faired better, like North Dakota which only dropped 2% during the recession and is now up 48% since 2006. > Historic Peak Levels
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