Mortgage Interest rates

July Mortgage Rates and Forecast. FHA, VA, Conventional USDA

What will Mortgage rates be in July 2018?
So far in 2018 Mortgage Rates have been trending upward, it looks like July will follow that trend.

With the growth of the economy and the Federal reserve aiming to raise rates for the remainder of the year it looks like the historically upward trend will continue.

First time home buyer’s shouldn’t be too discouraged, anything under 6% is a historically excellent rate and Conventional 20% down rates still look to be in the high 4’s.  (Subject to terms, conditions and approvals)
Verify your rate with a local Mortgage Professional.

July Predictions
July seems to be full of Market moving news.  What happens this month will impact the remainder of the year.
1. The Fed shows no signs of slowing down
Everyone saw the second benchmark rate raise coming.  The big surprise from this is the prediction of four rate hikes in 2018, up from the original prediction of 3 from earlier in the year.

The next group meeting is July 31st, but don’t expect a rate increase during this meeting.  The hikes are forecast to take place in September and December.

The Federal Reserve raised its benchmark Rate for the second time during its June meeting.  Everyone Expected that”

The meeting’s themselves don’t raise consumer mortgage rates, what happens before does.  The Fed doesn’t want to surprise anyone with unexpected rate increases, that spooks the market.  Historically members of the fed would broadcast their intentions before such crucial meetings.

Fed chief Jerome Powell stated,

“With unemployment low and expected to decline further, inflation close to our objective, and the risks to the outlook roughly balanced, the case for continued gradual increases in the federal funds rate is strong.”

As a Mortgage shopper the bottom line is that we are in the middle of a rising rate environment.  If you haven’t locked in your home purchase or refinance yet…..insert your favorite Anti-procrastination quote here.  In the short horizon their is not much hope that rates will fall back to Pre-2018 levels anytime soon.

2. The strong economy will continue to put upward pressure on rates.
Many people ask, “what does the economy have to do with Mortgage rates?”
Simple answer-Everything.
Simply put the better the economy the higher rates climb.  this happens because inflation takes off and investors are seeking higher returns than mortgage bonds can offer.  In response to this mortgage interest rates rise to keep investors interested in purchasing them.  This equals higher rates for consumers.

3. The unemployment rate is current just 3.8%
Except for one month during the year 2000 you would have to go back to 1960’s to see unemployment rates this low.

The good news is their doesn’t seem to be any major cracks in the economy.  Recent tax cuts have fanned the fire and companies are on a hiring spree.
This is all good new’s.  If you currently have a job you might be more likely to get a raise than at any time during your career.  but on the flip side of that is higher mortgage rates.

If you are in the market to buy a home or refinance one don’t look forward to rates dropping in 2018 or even early 2019.  It appears it’s going to raise throughout the remainder of the year.

4.The rise of the cash-out Refinance

Tapping into your home’s equity isn’t something new, but look for the trend to continue strongly in 2018.  U.S Home equity just reached $1 Trillion, this gives homeowners newfound wealth to improve their homes and pay off debt.  A lot of move up buyers are staying put and renovating their current home versus buying a larger home.

Many homeowners are using their home equity to remodel and expand their homes.

A Cash-out Refinance allows homeowners to remodel the kitchen, add a bathroom, take care of long needed repairs, add a pool or just about anything else money can buy.  Their are also no “rules” to what you can do with that Money.

5. What did the big 7 companies predict rates would be in 2017? 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advice for July 2018

Don’t wait for rates to hit 6%, Strike while the iron is hot.  Expert Advice is only a call or message away.  (518)324-5544.