Why You Can’t Afford As Much House Any More
Mortgage Rates Jump To 4-Year High, Suddenly
Mortgage rates just keep on climbing.
Friday, after the release of the January jobs report, mortgage rates took another step higher, ratcheting northward, and reaching points not seen since four years ago.
The low-rate era that’s characterized this decade may be on its way out for good.
Wall Street expects inflation and mortgage rates are suffering. So are buyers of homes.
In December, if you had $1,500 to spend on a mortgage each month, you could buy a home with nothing down for $320,000.
Today, that same payment gets you a $296,000 house.
That’s a huge reduction in purchase price and for many buyers, it means they’ve got to shift their search parameters. What you could afford to buy in December isn’t the same as what you can afford today.
Get with a lender and re-run your numbers. Mortgage rates are changing the game.
Today’s Mortgage Rates
Mortgage rates are up. But you knew this.
Conforming 30-year rates are now near 4.50 percent, where they haven’t been since 2014. FHA mortgage rates are a little lower at 4.375, and VA and USDA mortgage rates, for people who qualify, are near 4.25 percent.
Now, the actual rates you get from a lender might be higher or lower depending on your loan size, where you live, and the type of home you’re financing.
Talk to two or more lenders before settling on a rate, make sure to shop around, and given how quickly mortgage rates are moving this month, consider acting quickly.
Wage Growth Increases, Stokes Inflation Concerns
The Department of Labor Statistics released the January jobs report last Friday and the results were better-than-expected.
The data showed 200,000 jobs created last month, which is consistent with jobs data going back to 2010 and that’s not what excited the markets.
Where the report stood out was in the section that detailed Wage Growth, which showed private-sector workers earning close to three percent per hour more as compared to this time last year.
Wage growth matters because as workers earn more, they spend more, generating revenue for business who, in turn, go out and hire more workers.
It’s a positive cycle for the economy and one which can lead to inflation, which is why mortgage rates moved higher on the news.
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